Message from the Management
-- To all our shareholders and investors --

The Group's net sales and operating income both decreased under the impact of Covid-19 for the fiscal year ended March 31, 2021 (the second year of our 6th Medium-Term Management Plan)

Under the 6th Medium-Term Management Plan (covering the FY2019–2021 period) launched in April 2019, we have been giving priority to reinforce our corporate governance system and to leverage our wide-ranging business operations to achieve sustained growth.

In FY2020, we have reviewed each business strategy, promoted community development and products in response to changes in society and lifestyles, and steadily implemented various measures to strengthen the restructuring of group governance in order to balance offensive and defensive measures at a high level. However, due to the impact of Covid-19, total net sales came to 4 trillion 126.7 billion yen and operating income to 357.1 billion yen, while net income attributable to owners of the parent amounted to 195 billion yen.

Formulation of 6th Medium-Term Management Plan

We intend to press forward with updating the infrastructure of our Single-Family Houses Business and Rental Housing Business, aiming at renewed growth, and to focus efforts on expanding our operations in the fields of Commercial Facilities Business and Logistics, Business & Corporate Facilities Business. Also, we will strengthen our system for supervision of overseas business while making continuous investments in business operations. In addition to investment in growth, including in real estate development, we are also investing in the reinforcement of our technology base.

Turning to the Group's capital policy, we position return on equity (ROE) as one of our top-priority management indicators, and under the 6th Medium-Term Management Plan we have set the ROE target level at 13 percent or higher. As the debt-equity (D/E) ratio is an important indicator of financial stability, we are targeting a ratio of approximately 0.5. By setting and reaching these two targets, we aim to strike a good balance between enhancing enterprise value and maintaining financial discipline, while striving to make investment decisions that are simultaneously positive and carefully considered.

With regard to the return of profits to shareholders, our fundamental policy is to conduct investment in areas essential to growth – including real estate development, overseas projects, M&As, research and development, and production capacity – thereby raising earnings per share (EPS), so as to enhance the Group's shareholder value. We have set the dividend payout ratio at 30 percent or higher, and aim to maintain a stable dividend while returning profit that is linked to business performance. In addition, flexible acquisition of own shares is under consideration.

Going forward, in line with the Corporate Governance Guidelines, we will continue working to achieve a sustainable improvement in enterprise value, as well as enhanced shareholder value.
We look forward to the continued support and encouragement of our shareholders, investors, and all other stakeholders.

Keiichi Yoshii President, CEO and COO Takeshi Kosokabe Executive Vice President, CFO

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