Summary of operating results for the fiscal year ended March 31, 2019
I would like to express my genuine gratitude to our shareholders and investors for your continuing support and understanding.
I am pleased to announce a summary of operating results of our 42nd fiscal term (April 1, 2018 to March 31, 2019).
During the fiscal year under review, the Japanese economy continued along a moderate recovery track, due to improved corporate earnings and employment situation driven by economic and monetary policies by the government. Nevertheless, the willingness of young consumers to spend continued to be weak and the outlook for personal consumption remained cloudy.
As for the Sanyodo Groupfs operating environment, our business is affected by the increasingly diverse ways in which consumers spend their time due to video and music streaming, smartphones, etc. and the market for magazines and rentals continues to shrink. However, efforts including measures to fight pirated content on the Internet are having an effect, and the market for comics, etc. is growing.
Under this business environment, the Sanyodo Group is using a hybrid type of bookstore that sells both new and used books as the core of our strategy. We developed our DVD and CD rentals and sales sections for stationery, fancy goods, etc. in line with changing customer needs. At the same time, we developed our stores adjoining fitness facilities, classrooms and others as gbook variety storesh to meet the needs of people who seek to learn and become healthy.
In the fiscal year under review, we relocated and increased the floor space of the Kaguyama store (Nisshin City, Aichi Prefecture) and Komaki store (Komaki City, Aichi Prefecture), and increased the floor space of the Shimoedo store (Kani City, Gifu Prefecture) and LuVit TOWN Takayama store (Takayama City, Gifu Prefecture). On the other hand, we closed three stores and two schools, and as a result the number of stores at the end of the fiscal year under review came to 80 stores and four schools. Furthermore, we added Sports Club AXTOS Will_G fitness gyms to seven stores (four in Gifu Prefecture, two in Mie Prefecture, and one in Aichi Prefecture), bringing the total number of stores with fitness gyms to eight stores. Also, we introduced the self-checkout system, which was launched during the previous fiscal year, at 19 stores for a total of 20 stores.
As a result, for the fiscal year under review, sales declined 4.4% year on year to 20,400 million yen, operating profit declined 86.9% year on year to 32 million yen, and ordinary profit declined 77.2% year on year to 63 million yen. Loss attributable to owners of parent was 308 million yen (compared to profit attributable to owners of parent of 5 million yen in the previous fiscal year). This mainly reflected the recording of 287 million yen in impairment loss at several stores.
Amid a tough operating environment for the existing business, given the Sanyodo Groupfs profit level at its current stage and its judgement that prioritizing securing funds for implementing initiatives for future business transitions would lead to shareholder returns in the long term, we have decided not to pay dividends again for the fiscal year under review. We ask all our shareholders for their understanding in this regard.
At the Sanyodo Group, through the business format of the gbook variety store,h we will promote not only the existing bookstore business, but also the fitness and other new businesses, aiming to provide new value, enjoyment, and convenience to our customers.
We ask for your continued support and cooperation in the future as we rise to new challenges.