Income statement		FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21	FY03/22
		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales		29,356	32,541	37,260	37,469	41,706	43,963	44,726	44,453	45,542	47,025	52,400
	YoY	7.8%	10.9%	14.5%	0.6%	11.3%	5.4%	1.7%	-0.6%	2.5%	3.3%	-
Gross profit		5,243	6,056	7,052	6,599	7,236	7,542	7,644	8,037	7,785	7,823
	YoY	5.7%	15.5%	16.4%	-6.4%	9.6%	4.2%	1.4%	5.1%	-3.1%	0.5%
	Gross profit margin	17.9%	18.6%	18.9%	17.6%	17.3%	17.2%	17.1%	18.1%	17.1%	16.6%
Operating profit		1,676	2,317	2,932	2,416	2,769	2,715	2,695	3,131	2,142	1,959	3,200
	YoY	11.4%	38.2%	26.5%	-17.6%	14.6%	-1.9%	-0.7%	16.2%	-31.6%	-8.6%	-
	Operating profit margin	5.7%	7.1%	7.9%	6.4%	6.6%	6.2%	6.0%	7.0%	4.7%	4.2%	6.1%
Recurring profit		1,711	2,392	3,035	2,514	2,863	2,805	2,796	3,288	2,311	2,107	3,000
	YoY	13.3%	39.8%	26.8%	-17.1%	13.9%	-2.0%	-0.3%	17.6%	-29.7%	-8.8%	-
	Recurring profit margin	5.8%	7.4%	8.1%	6.7%	6.9%	6.4%	6.3%	7.4%	5.1%	4.5%	5.7%
Net income		942	1,361	1,763	1,568	1,732	1,744	1,828	2,066	1,413	1,733	2,000
	YoY	17.9%	44.6%	29.5%	-11.1%	10.5%	0.7%	4.8%	13.0%	-31.6%	22.6%	-
	Net margin	3.2%	4.2%	4.7%	4.2%	4.2%	4.0%	4.1%	4.6%	3.1%	3.7%	3.8%
Per-share data (split-adjusted; '000; JPY)
Shares issued (year-end; '000)		10,274	30,823	30,823	30,823	30,823	30,823	30,823	30,823	30,823	30,823
EPS		32.7	47.3	61.3	54.5	60.2	60.6	63.5	71.6	48.8	59.6	68.4
Book value per share		383.5	420.8	474.5	521.6	571.6	622.8	671.4	725.4	755.8	791.1
Dividend per share		10.0	8.0	8.0	8.0	12.0	14.0	16.0	18.0	23.0	24.0	24.0
Balance sheet (JPYmn)
Cash and cash equivalents		5,429	5,218	5,563	6,621	7,790	8,976	9,814	10,002	10,351	13,364
Accounts receivable		413	394	585	734	524	589	673	547	607	497
Inventories		9,591	13,952	16,598	17,657	19,752	25,447	25,905	24,765	31,058	30,495
Total current assets		15,778	19,942	23,190	25,530	29,148	35,581	36,942	36,127	43,051	45,476
Total assets		25,388	30,118	33,525	35,846	39,545	45,683	47,281	46,865	55,986	58,114
Accounts payable		1,844	2,300	2,637	2,773	3,054	3,232	3,409	3,133	3,249	3,255
Total interest-bearing debt		10,861	13,951	15,219	16,035	17,884	22,417	22,144	20,276	28,358	28,939
Total liabilities		14,351	18,008	19,869	20,762	22,922	27,561	27,725	25,741	33,843	34,821
Shareholders' equity		11,037	12,111	13,643	14,980	16,482	17,913	19,366	20,980	21,973	23,120
Net debt		5,432	8,732	9,656	9,414	10,095	13,441	12,330	10,274	18,006	15,575
Working capital		8,160	12,046	14,546	15,618	17,222	22,804	23,169	22,179	28,416	27,737
Cash flow statement (JPYmn)
Cash flows from operating activities		2,662	-2,099	-186	701	101	-2,885	2,156	3,043	-2,547	3,481
Cash flows from investing activities		-31	-866	-455	-173	-508	-562	-126	-504	-2,521	-410
Cash flows from financing activities		-535	2,755	987	532	1,575	4,141	-692	-2,351	5,403	-59
Financial ratios
ROA (RP-based)		6.8%	8.6%	9.5%	7.2%	7.6%	6.6%	6.0%	7.0%	4.5%	3.7%
ROE		8.8%	11.8%	13.7%	10.9%	11.0%	10.1%	9.8%	10.2%	6.6%	7.7%
Equity ratio		43.5%	40.2%	40.7%	41.8%	41.7%	39.2%	41.0%	44.8%	39.2%	39.8%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. Since company forecasts reflect the application of the new standard, and FY03/21 figures do not, YoY comparisons are not provided.

Trends and outlook

Quarterly trends and results

Cumulative		FY03/21		FY03/22		FY03/22
(JPYmn)		Q1	Q1–Q2	Q1	Q1–Q2	% of Est.	FY Est.
Sales		9,376	21,881	13,135	27,037	51.6%	52,400
	YoY	-	-	40.1%	23.6%		11.1%
Gross profit		1,436	3,584	2,540	5,263
	YoY	-	-	76.9%	46.8%
	Gross profit margin	15.3%	16.4%	19.3%	19.5%
SG&A expenses		1,493	2,959	1,574	3,199
	YoY	-	-	5.4%	8.1%
	SG&A-to-sales ratio	15.9%	13.5%	12.0%	11.8%
Operating profit		-57	625	966	2,064	64.5%	3,200
	YoY	-	-	-	230.4%		39.2%
	Operating profit margin	-	2.9%	7.4%	7.6%		6.1%
Recurring profit		-114	531	919	1,964	65.5%	3,000
	YoY	-	-	-	270.0%		43.2%
	Recurring profit margin	-	2.4%	7.0%	7.3%		5.7%
Net income		-112	319	633	1,335	66.8%	2,000
	YoY	-	-	-	318.1%		16.0%
	Net margin	-	1.5%	4.8%	4.9%		3.8%
Quarterly		FY03/21		FY03/22
(JPYmn)		Q1	Q2	Q1	Q2
Sales		9,376	12,505	13,135	13,903
	YoY	-	-	40.1%	11.2%
Gross profit		1,436	2,148	2,540	2,722
	YoY	-	-	76.9%	26.7%
	Gross profit margin	15.3%	17.2%	19.3%	19.6%
SG&A expenses		1,493	1,466	1,574	1,625
	YoY	-	-	5.4%	10.8%
	SG&A-to-sales ratio	15.9%	11.7%	12.0%	11.7%
Operating profit		-57	682	966	1,098
	YoY	-	-	-	60.9%
	Operating profit margin	-	5.5%	7.4%	7.9%
Recurring profit		-114	645	919	1,046
	YoY	-	-	-	62.2%
	Recurring profit margin	-	5.2%	7.0%	7.5%
Net income		-112	431	633	702
	YoY	-	-	-	62.9%
	Net margin	-	3.4%	4.8%	5.1%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Company forecasts are the most recent figures.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. For reference purposes, FY03/21 results have been retroactively adjusted to reflect the application of the new standard.

Quarterly performance by segment

Cumulative			FY03/21		FY03/22		FY03/22
(JPYmn)			Q1	Q1–Q2	Q1	Q1–Q2	% of Est.	FY Est.
Sales			9,376	21,881	13,135	27,037	51.6%	52,400
	YoY		-	-	40.1%	23.6%		11.1%
	Real Estate Sales		8,648	20,424	12,339	25,302	51.1%	49,520
		YoY	-	-	42.7%	23.9%		-
	Pre-cut Parts		664	1,325	728	1,598	61.5%	2,600
		YoY	-	-	9.5%	20.6%		-
	Real Estate Leasing		64	132	68	137	48.9%	280
		YoY	-	-	6.1%	3.7%		-
Segment profit			-114	531	919	1,964	65.5%	3,000
	YoY		-	-	-	270.0%		43.2%
	Real Estate Sales		-176	380	813	1,700	63.9%	2,660
		YoY	-	-	-	347.5%		-
		Segment profit margin	-	1.9%	6.6%	6.7%		5.4%
	Pre-cut Parts		16	61	69	175	99.8%	175
		YoY	-	-	327.6%	184.7%		-
	Real Estate Leasing		39	80	25	64	38.5%	165
		YoY	-	-	-36.3%	-20.1%		-
	Adjustments		7	10	12	26
Quarterly			FY03/21		FY03/22
(JPYmn)			Q1	Q2	Q1	Q2
Sales			9,376	12,505	13,135	13,903
	YoY		-	-	40.1%	11.2%
	Real Estate Sales		8,648	11,776	12,339	12,963
		YoY	-	-	42.7%	10.1%
	Pre-cut Parts		664	661	728	871
		YoY	-	-	9.5%	31.7%
	Real Estate Leasing		64	68	68	69
		YoY	-	-	6.1%	1.5%
Segment profit			-114	645	919	1,046
	YoY		-	-	-	62.2%
	Real Estate Sales		-176	556	813	887
		YoY	-	-	-	59.6%
		Segment profit margin	-	4.7%	6.6%	6.8%
	Pre-cut Parts		16	45	69	106
		YoY	-	-	327.6%	133.7%
	Real Estate Leasing		39	40	25	39
		YoY	-	-	-36.3%	-4.4%
	Adjustments		7	3	12	14

Source: Shared Research based on company data.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. For reference purposes, FY03/21 results have been retroactively adjusted to reflect the application of the new standard.

Homes sold and sales per home

Cumulative		FY03/21				FY03/22				FY03/22
(number of homes)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Total new homes sold		277	642	979	1,386	363	756			49.7%	1,520
	YoY	-12.3%	-6.0%	1.8%	3.4%	31.0%	17.8%				9.7%
Total pre-owned homes sold		33	67	102	137	38	75			53.6%	140
	YoY	-5.7%	-16.3%	-12.8%	-9.3%	15.2%	11.9%				2.2%
Quarterly		FY03/21				FY03/22
(number of homes)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Total new homes sold		277	365	337	407	363	393
	YoY	-12.3%	-0.5%	20.8%	7.4%	31.0%	7.7%
Total pre-owned homes sold		33	34	35	35	38	37
	YoY	-5.7%	-24.4%	-5.4%	2.9%	15.2%	8.8%

Source: Shared Research based on company data.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Existing areas refer to the sum of new homes sold in Tochigi, Ibaraki, Gunma, and Chiba prefectures.

(Reference) New housing starts for detached homes

Cumulative			FY03/21				FY03/22
(units)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Kanto region			16,779	31,431	47,091	62,368	17,151
	YoY		-12.6%	-16.7%	-15.7%	-13.2%	2.2%
Three North Kanto prefectures			1,865	3,385	5,187	7,051	2,153
	YoY		-8.7%	-19.8%	-17.6%	-13.7%	15.4%
	Tochigi		508	973	1,510	2,005	577
		YoY	-10.6%	-15.3%	-10.7%	-9.8%	13.6%
	Ibaraki		795	1,325	2,045	2,820	947
		YoY	-3.9%	-24.5%	-19.8%	-14.8%	19.1%
	Gunma		562	1,087	1,632	2,226	629
		YoY	-13.3%	-17.4%	-20.5%	-15.6%	11.9%
Quarterly			FY03/21				FY03/22
(units)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Kanto region			16,779	14,652	15,660	15,277	17,151
	YoY		-12.6%	-21.0%	-13.5%	-4.8%	2.2%
Three North Kanto prefectures			1,865	1,520	1,802	1,864	2,153
	YoY		-8.7%	-30.1%	-13.1%	-0.7%	15.4%
	Tochigi		508	465	537	495	577
		YoY	-10.6%	-20.0%	-0.7%	-7.3%	13.6%
	Ibaraki		795	530	720	775	947
		YoY	-3.9%	-42.8%	-9.4%	1.8%	19.1%
	Gunma		562	525	545	594	629
		YoY	-13.3%	-21.4%	-26.2%	1.9%	11.9%

Source: Shared Research based on Ministry of Land, Transport, Infrastructure and Tourism data

(Reference) Number of households

			2020	2020	2020	2021	2021	2021	2021	2022
('000 households)			Jun	Sep	Dec	Mar	Jun	Sep	Dec	Mar
Tochigi			846	848	849	850	853
	YoY		0.9%	0.9%	0.9%	0.9%	0.8%
Ibaraki			1,182	1,185	1,188	1,192	1,196
	YoY		1.0%	1.1%	1.1%	1.3%	1.2%
	Southern Ibaraki		423	425	427	429	431
		YoY	1.3%	1.5%	1.5%	1.7%	1.9%
Gunma			861	861	862	865	867
	YoY		0.9%	0.8%	0.8%	0.9%	0.7%
Chiba			2,795	2,767	2,773	2,817	2,794
	YoY		1.4%	0.2%	0.2%	1.7%	0.0%
	Kashiwa		193	194	194	196	198
		YoY	2.1%	2.0%	2.0%	2.3%	2.3%

Source: Shared Research based on statistical data from each prefecture

(Reference) Jobs-to-applicants ratio

		FY03/21				FY03/22
(times)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Nationwide		1.21	1.05	1.05	1.10	1.10
	YoY change (points)	-0.41	-0.54	-0.52	-0.35	-0.11
Tochigi		1.08	0.95	0.96	1.03	1.04
	YoY change (points)	-0.36	-0.44	-0.41	-0.23	-0.04
Ibaraki		1.36	1.22	1.22	1.29	1.36
	YoY change (points)	-0.26	-0.39	-0.39	-0.23	0.00
Gunma		1.34	1.08	1.15	1.16	1.23
	YoY change (points)	-0.39	-0.60	-0.48	-0.36	-0.11

Source: Shared Research based on data from the Ministry of Health, Labour and Welfare

(Reference) Flat 35 interest rate

		2020	2020	2020	2021	2021	2021	2021	2022
		Jun	Sep	Dec	Mar	Jun	Sep	Dec	Mar
Flat 35 (term 21–35 years)		1.29	1.32	1.31	1.35	1.35
	YoY change (points)	0.02	0.21	0.10	0.11	0.06

Source: Shared Research based on Japan Housing Finance Agency materials
Note: Flat 35 refers to mortgage loans with fixed interest rates for the full duration of the loan offered to consumers through a partnership between private financial institutions and the Japan Housing Finance Agency
Note: Interest rates until September 2017 show the minimum interest rates where the borrowing period is 21 to 35 years, the loan amount is 90% or less, and the loan amount is 90% or less.
Note: Interest rates for December 2017 and later show the minimum interest rates where the borrowing period is 21 to 35 years, the loan amount is 90% or less, and the loan comes with an insurance policy to guarantee full repayment of mortgage in case the borrower falls seriously ill or dies.

(Reference) Quarterly performance of detached homes (including sale of land) at Iida Group Holdings

Cumulative		FY03/21				FY03/22
		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
No. of detached homes		10,749	24,187	35,746	46,620	10,235
	YoY	9.0%	12.2%	12.3%	1.9%	-4.8%
Detached home sales (JPYmn)		283,217	651,432	973,994	1,268,367	291,428
	YoY	7.7%	12.6%	14.2%	3.8%	2.9%
Detached home gross profit (JPYmn)		35,127	90,918	145,332	197,480	61,595
	YoY	-11.4%	3.8%	15.4%	17.2%	75.3%
	Gross profit margin	12.4%	14.0%	14.9%	15.6%	21.1%
Quarterly		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
No. of detached homes		10,749	13,438	11,559	10,874	10,235
	YoY	9.0%	14.9%	12.6%	-22.0%	-4.8%
Detached home sales (JPYmn)		283,217	368,215	322,562	294,373	291,428
	YoY	7.7%	16.7%	17.5%	-20.1%	2.9%
Detached home gross profit (JPYmn)		35,127	55,791	54,414	52,148	61,595
	YoY	-11.4%	16.4%	42.2%	22.4%	75.3%
	Gross profit margin	12.4%	15.2%	16.9%	17.7%	21.1%

Source: Shared Research based on data from Iida Group Holdings Co., Ltd.
Note: Figures may differ from company materials due to differences in rounding methods.

1H FY03/22 results

Sales: JPY27.0bn (+23.6% YoY)
Operating profit: JPY2.1bn (+230.4% YoY)
Recurring profit: JPY2.0bn (+270.0% YoY)
Net income attributable to owners of the parent: JPY1.3bn (+318.1% YoY)

The company began applying the Accounting Standard for Revenue Recognition at the beginning of Q1 FY03/22. YoY comparisons are based on the retroactive application of the new standard to FY03/21 results.

The number of new and pre-owned homes sold in 1H FY03/22 increased compared to 1H FY03/21, when sales were strongly impacted by the downturn in economic activity due to the spread of COVID-19. As a result, sales grew and profits recovered.

Key initiatives

The housing industry is seeing a gradual recovery in the number of new housing starts toward pre-COVID-19 levels, due to the growing preference for detached housing and supportive measures for housing acquisition. However, the outlook remained uncertain, as lumber distribution prices remained high and the spread of infection overseas raised concerns about tightness in the supply of housing equipment and other products.
In the core new home sales business, the company focused on purchasing and sales promotion to expand its sales area in Saitama and Kanagawa prefectures, and started sales of large lots with a new concept in Ibaraki Prefecture.
In terms of pre-owned homes, the company bolstered purchasing to expand product inventory and increase the number of homes sold.

Real Estate Sales segment

Sales: JPY25.3bn (+23.9% YoY)
Segment profit: JPY1.7bn (+347.5% YoY)

Sales of new homes

The company sold 756 new homes (+114 units, or +17.8% YoY).
The company expanded its IT-based non-contact sales activities while enacting thorough measures to prevent the spread of COVID-19. In Saitama Prefecture, the company opened the Fujimino Branch (Fujimi, Saitama) to expand its sales area and strengthen its sales structure. It also aired a new TV commercial to raise brand awareness.
The subsidiaries in Kanagawa Prefecture expanded headcount and bolstered in-house construction project and management systems in order to further expand business.
On the product front, in response to the change in demand for living environments due to the pandemic, the company worked to differentiate itself from its competitors by offering high-value-added products, such as new housing solutions that respond to new lifestyles and safe and secure neighborhoods for families with children.
All of the homes at Sora Town Tsukuba Matsushiro (96 lots, Tsukuba, Ibaraki Prefecture), a strategic large-scale subdivision launched in September 2021, will be net-zero energy houses (ZEHs). Other initiatives have also been implemented to provide a sustainable lifestyle, such as an environmentally friendly building design that makes effective use of natural ventilation and lighting.

Sales of pre-owned homes

The company sold 75 pre-owned homes (+8 units, or +11.9% YoY).
It worked to increase the number of homes sold by enhancing its product inventory. Despite the lingering effects of the pandemic, the number of pre-owned homes sold grew thanks to the company's efforts to strengthen purchasing and sales by expanding online advertising and strengthening its cooperation with brokers and other parties.

Pre-cut Parts segment

Sales: JPY1.6bn (+20.6% YoY)
Segment profit: JPY175mn (+184.7% YoY)

Housing starts for wood frame houses recovered moderately due to increased demand for detached housing and other factors. The US futures market, however, which was a factor in the surge in lumber prices, fell to one-third of its peak in August. A gradual recovery in import volumes is causing demand for both imported and domestic lumber to loosen, but domestic prices for lumber remained strong.
Amid these conditions, the company worked to adjust purchasing and sales prices and ensure purchasing volume. These efforts contributed to sales and profit rising YoY.

Real Estate Leasing segment

Sales: JPY137mn (+3.7% YoY)
Segment profit: JPY64mn (-20.1% YoY)

The vacancy rate in the market for office buildings in and around Utsunomiya, a key area for the company, showed a recovery trend due to new store openings and relocations to the city center. Occupancy rates in the parking market turned toward recovery, but the operating environment nevertheless remained harsh.
Amid these conditions, the company worked to improve occupancy rates at existing assets and reduce management costs. In 1H FY03/22, the impact of rent reductions and exemptions to tenants implemented in 1H FY03/21 was limited and sales grew YoY on an increase in the number of newly leased properties. Segment profit declined YoY, however, due to expenses incurred in the renovation of leased properties.

FY03/22 company forecast

Company forecast		FY03/21			FY03/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Est.	FY Est.
Sales		21,881	25,273	47,154	27,037	25,363	52,400
	YoY	-	-	-	23.6%	0.4%	11.1%
Cost of sales		18,298			21,775
Gross profit		3,584			5,263
	YoY	-			46.8%
	Gross profit margin	16.4%			19.5%
SG&A expenses		2,959			3,199
	SG&A ratio	13.5%			11.8%
Operating profit		625	1,674	2,299	2,064	1,136	3,200
	YoY	-	-	-	230.4%	-32.1%	39.2%
	Operating profit margin	2.9%	6.6%	4.9%	7.6%	4.5%	6.1%
Recurring profit		531	1,564	2,095	1,964	1,036	3,000
	YoY	-	-	-	270.0%	-33.8%	43.2%
	Recurring profit margin	2.4%	6.2%	4.4%	7.3%	4.1%	5.7%
Net income		319	1,405	1,724	1,335	665	2,000
	YoY	-	-	-	318.1%	-52.7%	16.0%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. For reference purposes, FY03/21 results have been retroactively adjusted to reflect the application of the new standard.

Forecast by segment (FY03/21 figures do not reflect impact from the company’s application of Accounting Standard for Revenue Recognition)

Forecast by segment				FY03/21			FY03/22
(JPYmn)				1H Act.	2H Act.	FY Act.	1H Act.	2H Est.	FY Est.
Sales				21,820	25,205	47,025	27,037	25,363	52,400
	YoY			-4.2%	10.7%	3.3%	23.9%	0.6%	11.4%
	Real Estate Sales			20,363	23,752	44,116	25,302	24,218	49,520
		YoY		-4.2%	11.8%	3.8%	24.3%	2.0%	12.3%
		New homes		18,645	21,804	40,449			45,500
			YoY	-2.8%	12.8%	5.0%			12.5%
		Pre-owned homes		1,156	1,288	2,444			2,520
			YoY	-10.9%	4.1%	-3.6%			3.1%
		Renovations		562	659	1,221			1,500
			YoY	-27.0%	-3.4%	-15.9%			22.9%
	Pre-cut Parts			1,325	1,318	2,643	1,598	1,002	2,600
		YoY		-4.5%	-5.1%	-4.8%	20.6%	-24.0%	-1.6%
	Real Estate Leasing			131	135	266	137	143	280
		YoY		1.0%	3.0%	2.0%	4.4%	5.7%	5.1%
Recurring profit				537	1,570	2,107	1,964	1,036	3,000
	YoY			-60.0%	59.1%	-9.5%	265.8%	-34.0%	42.4%
	Net margin			2.5%	6.2%	4.5%	7.3%	4.1%	5.7%
	Real Estate Sales			386	1,360	1,745	1,700	960	2,660
		YoY		-67.7%	65.8%	-13.3%	341.0%	-29.4%	52.4%
		Net margin		1.9%	5.7%	4.0%	6.7%	4.0%	5.4%
	Pre-cut Parts			61	164	225	175	0	175
		YoY		-2.0%	103.7%	57.6%	186.3%	-99.8%	-22.1%
		Net margin		4.6%	12.4%	8.5%	10.9%	0.0%	6.7%
	Real Estate Leasing			79	75	154	64	101	165
		YoY		-11.7%	-9.7%	-10.7%	-19.5%	35.8%	7.4%
		Net margin		60.3%	55.1%	57.7%	46.5%	70.8%	58.9%

Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. Accordingly, FY03/22 forecast figures reflect impact from the application of this standard. YoY changes between results in FY03/21 and forecasts for FY03/22 have been calculated using the results originally reported by the company in FY03/21 (unadjusted to reflect impact from the adoption of the Accounting Standard for Revenue Recognition).

Number of homes sold, and sales per home (FY03/21 figures do not reflect impact from the company’s application of the Accounting Standard for Revenue Recognition)

Homes sold and sales per home			FY03/21			FY03/22
(number of homes)			1H Act.	2H Act.	FY Act.	FY Est.
Total new homes sold			642	744	1,386	1,520
	YoY		-6.0%	13.1%	3.4%	9.7%
	Existing areas		599	690	1,289	1,340
		YoY	-11.9%	9.2%	-1.8%	4.0%
	Saitama		26	29	55	120
		YoY	766.7%	141.7%	266.7%	118.2%
	Kanagawa		17	25	42	60
		YoY	-	-	200.0%	42.9%
Sales per new home (JPYmn)			29.0	29.3	29.2	29.9
	YoY		3.4%	-0.3%	1.6%	2.6%
Pre-owned homes sold			67	70	137	140
	YoY		-16.3%	-1.4%	-9.3%	2.2%
Sales per pre-owned home (JPYmn)			17.3	18.4	17.8	18.0
	YoY		6.3%	5.6%	6.3%	0.9%

Source: Shared Research based on company data
Notes: Figures may differ from company materials due to differences in rounding methods.
Existing areas refer to the sum of new homes sold in Tochigi, Ibaraki, Gunma, and Chiba prefectures.
The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) in FY03/22. Accordingly, FY03/22 forecast figures reflect impact from the application of this standard. YoY changes between results in FY03/21 and forecasts for FY03/22 have been calculated using the results originally reported by the company in FY03/21 (unadjusted to reflect impact from the adoption of the Accounting Standard for Revenue Recognition).

The company revised its FY03/22 forecast in August 2021. The company now forecasts sales of JPY52.4bn (+11.1% YoY), operating profit of JPY3.2bn (+39.2% YoY), recurring profit of JPY3.0bn (+43.2% YoY), net income attributable to owners of the parent of JPY2.0bn (+16.0% YoY), and an annual dividend of JPY24.0 per share (up from previous forecast of JPY20.0 per share). The annual dividend in FY03/21 was JPY24.0 per share.

While maintaining its sales forecast, the company lifted its forecast for operating profit by JPY600mn, recurring profit by JPY600mn, and net income attributable to owners of the parent by JPY400mn.

Reason for revisions

With a growing preference for detached housing contributing to a steady expansion in orders, mainly in the Tokyo metropolitan area (including Saitama, Chiba, and Kanagawa prefectures), and a recovery in demand for housing in existing areas, mainly in Tochigi Prefecture, the company expects its efforts to improve profit margins and bolster its procurement and production systems to meet this demand to result in profit exceeding its prior forecasts.

YoY comparison

Although COVID-19 vaccination programs have been launched, there is no clear end to the pandemic in sight, and the company expects the Japanese economy to remain in a challenging environment. Figures presented in the company’s FY03/22 forecast reflects the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29), which it started adopting in FY03/22. Year-on-year changes indicated below are based on comparisons with FY03/21 results as they were originally recorded (unadjusted to reflect the company’s application of the Accounting Standard for Revenue Recognition).

Grandy House expects sales and all profit categories to increase YoY driven by growth in the number of new homes sold, primarily in Saitama and Kanagawa prefectures.

The company forecast by segment is as follows.

Real Estate Sales (sales of new homes)

The company forecasts sales of JPY49.5bn (+12.3% YoY) and segment profit of JPY2.7bn (+52.4% YoY).

The company expects sales to grow YoY on the back of an increase in the number of new homes sold. It also anticipates segment profit to grow YoY due to higher sales despite an expected rise in expenses as the company plans to strengthen its salesforce in Saitama and Kanagawa prefectures and run ads. Further, in the existing sales areas of Tochigi, Ibaraki, Gunma, and Chiba prefectures, the company plans to air a new television commercial.

New home sales

The company projects new home sales of JPY45.5bn (+12.5% YoY). It expects to sell 1,520 new homes (+9.7% YoY), with expected sales per new home of JPY29.9mn (+2.6% YoY).

In terms of the number of new homes sold, the company projects sales growth in Saitama (120 homes expected to be sold, +118.2% YoY) and Kanagawa (60, +42.9% YoY) prefectures to drive overall growth. In the existing sales areas (Tochigi, Ibaraki, Gunma, and Chiba prefectures), it expects to sell a total of 1,340 homes (+4.0% YoY).

Sales per new home is expected to grow YoY led by an increase in the share of new homes sold in Saitama and Kanagawa prefectures—areas with relatively high land prices and average sales prices—in the sales mix.

Pre-owned home sales

The company expects pre-owned home sales of JPY2.5bn (+3.1% YoY). It expects 140 pre-owned homes to be sold (2.2% YoY) and sales per pre-owned home sold of JPY18.0mn (+0.9% YoY). The company intends to enhance online advertising and expand its sales structure comprising a small number of personnel focused on responding to inquiries.

Pre-cut Parts

Grandy House projects sales of JPY2.6bn (-1.6% YoY) and segment profit of JPY175mn (-22.1% YoY). The forecast for lower sales and operating profit stems from an expected decline in demand for pre-cut parts accompanying a decline in the number of housing starts for wood-frame houses and a fall in profitability on higher wood materials prices.

Real Estate Leasing

The company forecasts sales of JPY280mn (+5.1% YoY) and segment operating profit of JPY165mn (-7.4% YoY).

Medium- to long-term outlook

The company formulated its third medium-term business plan in August 2021.

In its second medium-term business plan (FY03/19—FY03/21), the company worked to accelerate growth in its core Real Estate Sales business and strengthen its operational base to support sustainable growth. This allowed the company to maintain and improve its market share in existing areas and expand its sales area to include Saitama and Kanagawa prefectures, which resulted in sales and the number of new homes sold reaching record highs. However, the company was unable to attain its plan targets due to the curbs put on economic activity by the COVID-19 pandemic.

In the third medium-term business plan, for which the final year is FY03/24, the company aims to take advantage of the changes in the business environment brought on by the pandemic to expand its business. The company also intends to continue strengthening its operational base in order to achieve sustainable growth while at the same time enhancing its efforts to contribute to the development of a sustainable society.

Basic policies

Expand the operating area and strengthen the business base to achieve sustainable growth in the new home sales business.
Expand the scale of the housing stock business and maximize synergies with the new home sales business.
Strengthen efforts to address sustainability (ESG) issues so as to improve corporate value over the medium to long term.

Management targets

The company’s third Medium-Term Management Plan targets JPY60.0bn in sales for FY03/24 (average annual growth of 8.5% compared to FY03/21), as well as JPY4.0bn in recurring profit (23.8%), and JPY2.6bn in net income (14.5%). Grandy House projects that growth in recurring profit will outpace growth in sales as its fixed cost-to-sales ratio declines along with the increase in sales. The company aims to sell 1,700–1,800 new homes in FY03/24 (versus 1,386 in FY03/21).

Management targets	FY03/21 (act.)	Revised FY03/22 targets	FY03/24 targets
Sales	JPY47.1bn	JPY52.4bn	JPY60.0bn
Recurring profit	JPY2.0bn	JPY3.0bn	JPY4.0bn
Net income	JPY1.7bn	JPY2.0bn	JPY2.6bn
ROE	7.7%	8.5%	9.5%

Management strategies

Expand the operating area and strengthen the business base to achieve sustainable growth in the new home sales business.

Prioritize the allocation of management resources to expand business in high-growth areas such as Tokyo, Saitama, Chiba, and Kanagawa: The company plans to expand its business into areas adjacent to already existing sales areas. As of August 2021, the company had successfully purchased 20 lots’ worth of land in the Nerima Ward of Tokyo, which is directly adjacent to Saitama. In view of these circumstances, the company will discuss circumstances impacting its sales moving forward. In Chiba, the company’s expansion efforts have primarily targeted the city of Kashiwa, but the company plans to broaden these efforts to include the cities of Funabashi and Ichikawa.
Improve productivity and stability in procurement by strengthening the supply chain, including through the establishment of an integrated group system: In July 2019, the company expanded into Kanagawa Prefecture as it acquired Plaza House Inc. and Welcome House Inc., making them subsidiaries. Previously, these companies had been outsourcing construction but began to perform own construction within the company group in FY03/22 in an effort to raise its profitability.
Develop high-value-added living environments that conform to new lifestyles and address environmental concerns: Previously, the company’s property lineup primarily consisted of 4LDK properties (four rooms plus a combined living room, dining room, and kitchen), but the company will enhance its sales inventory of 5LDK properties that facilitate remote work. In the meantime, the company will also focus on expanding its sales inventory of net-zero energy houses (ZEH).
Pursue strategic investments, including M&A, to accelerate growth within the group

Net-zero energy houses (ZEH): Houses designed to eliminate annual net energy consumption through energy-conserving features, such as heightened outer wall insulation and highly energy-efficient facilities, and the implementation of renewable energy-based technologies

Expand the scale of the housing stock business and maximize synergies with the new home sales business.

Expand to new business areas within the pre-owned home sales business.
Given the increase in the number of older existing customers and the revitalization of the market for housing stock, strengthen value-enhancing renovations, including by improving energy efficiency and resilience to disasters.

Strengthen efforts to address sustainability (ESG) issues so as to improve corporate value over the medium to long term.

Improve traceability in the supply chain to reduce the company's impact on the environment
Expand the scale of the housing stock business and strengthen services to contribute to the realization of a recycling-oriented society.
Expand investment in human capital and enhance diversity to achieve a sustainable expansion in the company’s business.
Build a governance system conforming to the high standards required in the Prime Market.

Basic policies on the distribution of profits and capital strategies

The company strives to maintain an appropriate balance between shareholder equity and debt so that it can efficiently and reliably secure the funds necessary to expand its business and continually improve corporate value. Shareholder equity and on-hand liquidity shall be determined by taking into account capital efficiency as well as the risks involved in raising funds, including a deterioration in financial conditions.

In terms of its policy on the distribution of profits, the company considers increasing enterprise value and proactively returning profits to shareholders to be one of its key management issues. As such, the company’s dividend policy is based on business performance and a consolidated payout ratio target of 35%, which is 5pp higher than in the previous medium-term business plan. The company has stated that it will continue to work toward further improvements in this policy.

Business

Summary

Grandy House’s primary business consists in acquiring land, building new homes, and selling them (including custom-built homes and land) in Tochigi, Ibaraki, Gunma, and Chiba prefectures. It has three business segments: Real Estate Sales (sales of newly built and pre-owned homes), Pre-cut Parts (manufacturing and sales of home building materials), and Real Estate Leasing (leasing of offices and homes).

Segment	Business
Real Estate Sales	Sales of new and pre-owned homes (including custom-built homes and land)
Pre-cut Parts	Manufacturing and sales of pre-cut parts, construction materials, and housing equipment
Real Estate Leasing	Leasing of offices, homes, and parking facilities

In FY03/21, the company generated 93.8% of its sales and 82.8% of operating profit from the Real Estate Sales segment. The segment sold 1,523 homes (1,386 new homes, 137 pre-owned homes), compared with 1,492 a year earlier (1,341 new homes, 151 pre-owned homes). The company also manufactures and sells pre-cut wooden parts for construction, and leases apartments and commercial buildings.

Segment sales and profit

			FY12/03	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)			Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales			29,356	32,541	37,260	37,469	41,706	43,963	44,726	44,453	45,542	47,025
	YoY		7.8%	10.9%	14.5%	0.6%	11.3%	5.4%	1.7%	-0.6%	2.5%	3.3%
	Real Estate Sales		27,012	30,117	34,389	34,587	38,549	40,674	41,492	41,212	42,505	44,116
		YoY	7.6%	11.5%	14.2%	0.6%	11.5%	5.5%	2.0%	-0.7%	3.1%	3.8%
		% of total	92.0%	92.6%	92.3%	92.3%	92.4%	92.5%	92.8%	92.7%	93.3%	93.8%
	Pre-cut Parts		2,008	2,096	2,610	2,600	2,895	3,030	2,971	2,992	2,776	2,643
		YoY	9.0%	4.3%	24.5%	-0.4%	11.3%	4.7%	-2.0%	0.7%	-7.2%	-4.8%
		% of total	6.8%	6.4%	7.0%	6.9%	6.9%	6.9%	6.6%	6.7%	6.1%	5.6%
	Real Estate Leasing		335	328	261	281	263	258	263	248	261	266
		YoY	19.6%	-2.0%	-20.3%	7.7%	-6.6%	-1.6%	1.8%	-5.6%	5.2%	2.0%
		% of total	1.1%	1.0%	0.7%	0.8%	0.6%	0.6%	0.6%	0.6%	0.6%	0.6%
Segment profit			1,711	2,392	3,035	2,514	2,863	2,805	2,796	3,288	2,311	2,107
	YoY		11.4%	38.2%	26.5%	-17.6%	14.6%	-1.9%	-0.7%	16.2%	-31.6%	-8.6%
	Real Estate Sales		1,393	2,079	2,809	2,257	2,534	2,497	2,485	2,977	2,014	1,745
		YoY	5.7%	49.2%	35.1%	-19.7%	12.3%	-1.4%	-0.5%	19.8%	-32.4%	-13.3%
		% of total	81.4%	86.9%	92.6%	89.8%	88.5%	89.0%	88.9%	90.5%	87.1%	82.8%
	Pre-cut Parts		87	165	121	153	189	148	148	151	143	225
		YoY	428.1%	88.9%	-26.7%	27.0%	23.0%	-21.4%	-0.3%	2.6%	-5.9%	57.6%
		% of total	5.1%	6.9%	4.0%	6.1%	6.6%	5.3%	5.3%	4.6%	6.2%	10.7%
	Real Estate Leasing		232	193	133	173	166	155	173	151	172	154
		YoY	32.1%	-16.6%	-31.1%	29.7%	-4.0%	-6.2%	11.0%	-12.3%	13.8%	-10.7%
		% of total	13.5%	8.1%	4.4%	6.9%	5.8%	5.5%	6.2%	4.6%	7.5%	7.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Business description

Business segments

Real Estate Sales (93.8% of sales and 82.8% of segment profit in FY03/21)

This segment sells new and pre-owned homes including custom-built homes and land.

Performance of the Real Estate Sales segment

		FY12/03	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales		27,012	30,117	34,389	34,587	38,549	40,674	41,492	41,212	42,505	44,116
	YoY	7.6%	11.5%	14.2%	0.6%	11.5%	5.5%	2.0%	-0.7%	3.1%	3.8%
Segment profit		1,393	2,079	2,809	2,257	2,534	2,497	2,485	2,977	2,014	1,745
	YoY	5.7%	49.2%	35.1%	-19.7%	12.3%	-1.4%	-0.5%	19.8%	-32.4%	-13.3%
	Operating profit margin	5.2%	6.9%	8.2%	6.5%	6.6%	6.1%	6.0%	7.2%	4.7%	4.0%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

The segment’s business comprises detached homes, custom-built homes, land, other real estate businesses (sales of pre-owned homes), and other (additional construction work). In FY03/21, the construction and sales of detached homes was the mainstay business, accounting for 86.4% of segment sales.

Performance of the Real Estate Sales segment by category

			FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)			Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales (JPYmn)			27,012	30,117	34,389	34,587	38,549	40,674	41,492	41,212	42,505	44,116
	YoY		7.6%	11.5%	14.2%	0.6%	11.5%	5.5%	2.0%	-0.7%	3.1%	3.8%
	Detached homes (JPYmn)		21,530	24,901	28,669	29,494	33,359	35,711	35,880	35,250	36,398	38,102
		YoY	8.0%	15.7%	15.1%	2.9%	13.1%	7.0%	0.5%	-1.8%	3.3%	4.7%
		% of total	79.7%	82.7%	83.4%	85.3%	86.5%	87.8%	86.5%	85.5%	85.6%	86.4%
	Custom-built homes (JPYmn)		1,289	958	1,342	1,151	1,210	695	730	1,087	734	745
		YoY	21.0%	-25.7%	40.1%	-14.2%	5.1%	-42.6%	5.1%	48.8%	-32.5%	1.4%
		% of total	4.8%	3.2%	3.9%	3.3%	3.1%	1.7%	1.8%	2.6%	1.7%	1.7%
	Land (JPYmn)		592	578	725	717	476	281	714	348	926	974
		YoY	-14.9%	-2.4%	25.3%	-1.0%	-33.6%	-41.1%	154.4%	-51.3%	166.3%	5.2%
		% of total	2.2%	1.9%	2.1%	2.1%	1.2%	0.7%	1.7%	0.8%	2.2%	2.2%
	Other real estate (JPYmn)		3,002	2,923	2,419	1,899	1,904	2,196	2,295	2,398	2,535	2,444
		YoY	-1.9%	-2.7%	-17.2%	-21.5%	0.2%	15.4%	4.5%	4.5%	5.7%	-3.6%
		% of total	11.1%	9.7%	7.0%	5.5%	4.9%	5.4%	5.5%	5.8%	6.0%	5.5%
	Others (JPYmn)		599	758	1,234	1,326	1,600	1,791	1,872	2,130	1,912	1,851
		YoY	65.5%	26.5%	62.7%	7.5%	20.7%	11.9%	4.5%	13.7%	-10.2%	-3.2%
		% of total	2.2%	2.5%	3.6%	3.8%	4.2%	4.4%	4.5%	5.2%	4.5%	4.2%
Number of properties (units)			943	1,042	1,211	1,226	1,327	1,367	1,425	1,382	1,381	1,422
	YoY		9.0%	10.5%	16.2%	1.2%	8.2%	3.0%	4.2%	-3.0%	-0.1%	3.0%
	Detached homes (units)		820	941	1,077	1,099	1,224	1,307	1,304	1,301	1,307	1,346
		YoY	9.6%	14.8%	14.5%	2.0%	11.4%	6.8%	-0.2%	-0.2%	0.5%	3.0%
		Unit price (JPYmn)	26.3	26.5	26.6	26.8	27.3	27.3	27.5	27.1	27.8	28.3
	Custom-built homes (units)		75	56	74	71	66	39	37	54	34	40
		YoY	19.0%	-25.3%	32.1%	-4.1%	-7.0%	-40.9%	-5.1%	45.9%	-37.0%	17.6%
		Unit price (JPYmn)	17.2	17.1	18.1	16.2	18.3	17.8	19.7	20.1	21.6	18.6
	Land (units)		48	45	60	56	37	21	84	27	40	36
		YoY	-11.1%	-6.3%	33.3%	-6.7%	-33.9%	-43.2%	300.0%	-67.9%	48.1%	-10.0%
		Unit price (JPYmn)	12.3	12.9	12.1	12.8	12.9	13.4	8.5	12.9	23.1	27.1
	Pre-owned homes (units)				128	112	117	136	138	151	151	137
		YoY			-	-12.5%	4.5%	16.2%	1.5%	9.4%	0.0%	-9.3%
		Unit price (JPYmn)			18.9	17.0	16.3	16.1	16.6	15.9	16.8	17.8

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Detached homes (86.4% of segment sales in FY03/21)

Building and selling detached homes to first-time buyers in Tochigi, Ibaraki, Gunma, and Chiba prefectures

The company’s main business is the construction and sales of detached homes. The company acquires land in Tochigi, Ibaraki, Gunma, and Chiba prefectures and builds standardized homes for sale on that land. Such developments target average income earners, most of them first-time buyers.

Grandy House specializes in wooden structures, by far the most common material for detached dwellings in Japan. The average home size is 110–125sqm and the average price was JPY28.3mn (sales of detached homes in FY03/21 divided by the number of units sold). House sizes vary with location. First-time buyers tend to be young, have similar incomes, and therefore have similar credit profiles.

Sales composition ratio highest in Tochigi Prefecture, with room for growth in Ibaraki, Gunma, Chiba, and Saitama prefectures

Sales of detached homes by area and the number of units sold

			FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)			Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Detached home sales			21,530	24,901	28,669	29,494	33,359	35,711	35,880	35,250	36,434	39,277
	YoY		8.0%	15.7%	15.1%	2.9%	13.1%	7.0%	0.5%	-1.8%	3.4%	-
	Tochigi		11,881	14,085	15,694	14,960	15,690	16,754	16,722	16,991	15,968	17,099
		YoY	10.0%	18.6%	11.4%	-4.7%	4.9%	6.8%	-0.2%	1.6%	-6.0%	-
		% of total	55.2%	56.6%	54.7%	50.7%	47.0%	46.9%	46.6%	48.2%	43.8%	43.5%
	Ibaraki		6,727	7,710	8,259	7,654	9,319	9,647	10,715	10,632	11,003	9,910
		YoY	2.9%	14.6%	7.1%	-7.3%	21.7%	3.5%	11.1%	-0.8%	3.5%	-
		% of total	31.2%	31.0%	28.8%	26.0%	27.9%	27.0%	29.9%	30.2%	30.2%	25.2%
	Gunma		2,564	2,679	2,953	3,635	4,491	4,612	4,231	4,468	4,521	4,258
		YoY	5.6%	4.5%	10.2%	23.1%	23.5%	2.7%	-8.3%	5.6%	1.2%	-
		% of total	11.9%	10.8%	10.3%	12.3%	13.5%	12.9%	11.8%	12.7%	12.4%	10.8%
	Chiba		-	427	1,763	3,244	3,860	4,698	4,212	3,160	3,700	3,838
		YoY	-	-	312.8%	84.0%	19.0%	21.7%	-10.3%	-25.0%	17.1%	-
		% of total	-	1.7%	6.1%	11.0%	11.6%	13.2%	11.7%	9.0%	10.2%	9.8%
	Saitama										606	2,311
		YoY									-	-
		% of total									1.7%	5.9%
	Kanagawa										636	1,861
		YoY									-	-
		% of total									1.7%	4.7%
Number of detached homes (units)			820	941	1,077	1,099	1,224	1,307	1,304	1,301	1,307	1,386
	YoY		9.6%	14.8%	14.5%	2.0%	11.4%	6.8%	-0.2%	-0.2%	0.5%	6.0%
	Tochigi (units)		463	546	616	584	616	650	650	663	615	653
		YoY	8.4%	17.9%	12.8%	-5.2%	5.5%	5.5%	0.0%	2.0%	-7.2%	-
		% of total	56.5%	58.0%	57.2%	53.1%	50.3%	49.7%	49.8%	51.0%	47.1%	47.1%
	Ibaraki (units)		248	280	297	282	337	354	377	372	375	364
		YoY	9.7%	12.9%	6.1%	-5.1%	19.5%	5.0%	6.5%	-1.3%	0.8%	-
		% of total	30.2%	29.8%	27.6%	25.7%	27.5%	27.1%	28.9%	28.6%	28.7%	26.3%
	Gunma (units)		95	101	110	138	166	172	157	167	176	162
		YoY	6.7%	6.3%	8.9%	25.5%	20.3%	3.6%	-8.7%	6.4%	5.4%	-
		% of total	11.6%	10.7%	10.2%	12.6%	13.6%	13.2%	12.0%	12.8%	13.5%	11.7%
	Chiba (units)		-	14	54	95	105	131	120	99	112	108
		YoY	-	-	285.7%	75.9%	10.5%	24.8%	-8.4%	-17.5%	13.1%	-
		% of total	-	1.5%	5.0%	8.6%	8.6%	10.0%	9.2%	7.6%	8.6%	7.8%
	Saitama (no. of customers)										15	57
		YoY									-	-
		% of total									1.1%	4.1%
	Kanagawa (no. of customers)										14	42
		YoY									-	-
		% of total									1.1%	3.0%
Detached homes unit price			26.3	26.5	26.6	26.8	27.3	27.3	27.5	27.1	27.9	28.3
	YoY		-1.4%	0.8%	0.6%	0.8%	1.6%	0.3%	0.7%	-1.5%	2.9%	-
	Tochigi		25.7	25.8	25.5	25.6	25.5	25.8	25.7	25.6	26.0	26.2
		YoY	1.4%	0.5%	-1.2%	0.5%	-0.6%	1.2%	-0.2%	-0.4%	1.3%	-
	Ibaraki		27.1	27.5	27.8	27.1	27.7	27.3	28.4	28.6	29.3	27.2
		YoY	-6.2%	1.5%	1.0%	-2.4%	1.9%	-1.4%	4.3%	0.6%	2.7%	-
	Gunma		27.0	26.5	26.8	26.3	27.1	26.8	26.9	26.8	25.7	26.3
		YoY	-1.1%	-1.7%	1.2%	-1.9%	2.7%	-0.9%	0.5%	-0.7%	-4.0%	-
	Chiba		-	30.5	32.6	34.1	36.8	35.9	35.1	31.9	33.0	35.5
		YoY	-	-	7.0%	4.6%	7.7%	-2.4%	-2.1%	-9.1%	3.5%	-
	Saitama										40.4	40.5
		YoY									-	-
	Kanagawa										45.4	44.3
		YoY									-	-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
In FY03/21, the company changed the way it classifies sales and number of homes sold by region. In contrast with prior practice, the company began including custom-built homes under the category of detached homes, effective from the beginning of FY03/21.

By area, Tochigi Prefecture, where the company originates from, has the highest sales composition ratio, followed by Ibaraki and Gunma prefectures. In Chiba Prefecture, where the company started operating business in earnest in FY03/14, the sales reached 13.2% of total sales in FY03/17, remained at around 10% from FY03/18, and accounted for 9.8% of total sales in FY03/21. In Saitama Prefecture, the company opened a branch office and began procuring subdivided plots of land in FY03/19, and commenced sales in FY03/20. In FY03/21, 5.9% of the company’s sales were generated in Saitama.

The number of units sold fluctuates depending on the external factors of demographic shifts and the state of the economy and the internal factors of the company’s product appeal, sales capability, and supply volume. In FY03/21, Grandy House’s market share (calculated by Shared Research based on the number of units sold divided by the number of housing starts according to data from the Ministry of Land, Infrastructure, Transport and Tourism) was 29.4% in Tochigi Prefecture (versus 27.7% in FY03/20), 11.0% in Ibaraki Prefecture (11.3%), 6.1% in Gunma Prefecture (6.7%), 0.9% in Chiba Prefecture (1.0%), 0.4% in Saitama Prefecture (0.1%), and 0.3% in Kanagawa Prefecture (0.1%). In terms of sales outposts (headquarters and branches), the company had 10 offices in Tochigi Prefecture, seven offices in Ibaraki Prefecture, three offices in Gunma Prefecture, one office in Chiba Prefecture, two offices in Saitama Prefecture, and one office in Kanagawa Prefecture. Shared Research thinks that building an effective network of sales outposts may lead to sales growth in Ibaraki, Gunma, Chiba, and Saitama prefectures.

Unit price of detached homes in Tochigi, Ibaraki, and Gunma prefectures is on the same level and has been on a stable track. Unit price is higher in Chiba and Saitama prefectures due to its higher land value.

Tochigi, Ibaraki, Gunma, Chiba, and Saitama prefectures: Population, number of households, and annual salaries

	Total population (‘000)	No. of households (‘000)	Annual salaries (JPYmn)
Tochigi	1,949	852	4.6
Ibaraki	2,845	1,192	4.8
Gunma	1,918	818	4.6
Chiba (Kashiwa)	6,280 (435)	2,824 (196)	4.8
Saitama (Saitama)	7,345 (1,330)	3,234 (619)	4.7
Kanagawa	9,246	4,260	5.3

Source: Shared Research based on company data
Note: Population and the number of households were as of May 2020.
Note: Annual salaries were calculated by adding annual bonuses and other payments to regular salaries based on data from the Ministry of Health, Labour and Welfare.

Housing starts in Tochigi, Ibaraki, Gunma, Chiba, and Saitama prefectures: overall vs. detached homes (April 2020–March 2021)

	Total housing starts (homes)	Owned homes	Detached homes
Tochigi	10,651	5,865	2,005
Ibaraki	16,380	8,636	2,820
Gunma	9,988	5,562	2,226
Chiba	43,121	12,549	9,603
Saitama	47,975	14,448	12,955
Kanagawa	61,589	13,550	13,879

Source: Shared Research based on “Building Starts” statistics published by Ministry of Land, Infrastructure, Transport and Tourism.

In these areas, the overall number of housing starts represented about 2% of all households. Most housing starts were for homes to be owned (in Chiba and Saitama prefectures, to be rented), comprising roughly 50% of the total (28% in Chiba, 30% in Saitama, and 22% in Kanagawa). In FY03/21, the composition ratio of detached homes in housing starts was 18.8% in Tochigi Prefecture (18.2% in FY03/20), 17.2% in Ibaraki Prefecture (18.6% in FY03/20), 22.3% in Gunma Prefecture (22.7% in FY03/20), 22.3% in Chiba Prefecture (25.9% in FY03/20), 27.0% in Saitama Prefecture (29.1% in FY03/20), and 22.5% in Kanagawa Prefecture (23.9% in FY03/20).

Directly acquiring lots and developing them from preparation of the ground to heighten their product values

Collecting information on its own, the company tries to bypass brokers and find properties requiring special expertise and effort to develop, like irregularly shaped, sloping, mountainous, and agricultural lots. Its strategy is to acquire those lots directly and develop them from preparation of the ground to heighten their product values. By developing a tract comprised of 10 to 30 sections based on direct acquisition by its employees, the company is able to create an original townscape and provide relatively wide and high-quality housing lots in comparison to those sold by major housing makers, backed by a relatively low acquisition price. The number of houses on directly purchased lots accounted for about 35–40% of all houses it handled.

The process from land acquisition to the delivery of a finished house typically takes about eight months. Houses are often built before they are under contract for sale, which allows customers to “window shop” for finished homes. Customers can then choose kitchen appliances, custom furniture, and optional equipment. After the sale, the company provides a 20-year structural warranty that requires billable maintenance work when 10-year and 15-year regular inspections are conducted. It also provides five years of termite warranty; and performs three-month, one-year, and two-year check-up visits. Assistance in obtaining financing is also provided.

Custom-built homes: 1.7% of segment sales in FY03/21

The company started offering built-to-order houses in 1996, before it started selling detached subdivided homes. This business is profitable but is unlikely to expand substantially. The company competes with national and local homebuilders.

Residential land (land) sales: 2.2% of segment sales in FY03/21

Land sales are a natural extension of the company’s core business. The company will sell both large plots and subdivided individual plots when doing so is more profitable than selling homes on the property. In 2006, the company attempted to create a standalone land-sales segment; however, as of May 2020, the company has deemphasized this activity.

Other real estate businesses (home resales, etc.): 5.5% of segment sales in FY03/21

Other real estate businesses center on home resales. This is a relatively new business for the company, and it is growing quickly from a low base. The resale housing market in Japan is substantially underdeveloped compared with other countries but will likely grow in coming years. By using its knowledge of local resale markets, the company purchases homes, refurbishes them, and then resells them. The entire process takes approximately three months.

According to the company, home resales have little cannibalizing effect on the market for new homes. Many home buyers are drawn first to properties that are close to work or relatives—they do not consider homes outside of a particular radius. Accordingly, the company focuses its advertising for each home within a two-kilometer radius of the property. Further separating its new and pre-owned home businesses, the company sells pre-owned homes under a different brand (Chukojutaku Johokan). Shared Research expects this segment to grow in importance.

In FY03/21, the company resold 137 units (-9.3% YoY).

Pre-cut Parts (5.6% of sales and 10.2% of segment profit in FY03/21)

This segment manufactures and sells pre-cut parts for houses, as well as other construction materials and housing equipment.

Grandy House uses approximately half of its factory output for the construction of its own homes. The other half of the output, which constitutes its Pre-cut Parts business, is sold to smaller builders. The portion used for the construction of its own homes are eliminated from consolidated results as inter-segment transactions or transfers. Segment profit is affected by changes in wood material prices.

Performance of the Pre-cut Parts segment

			FY12/03	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)			Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales			3,819	4,300	5,287	5,560	6,083	6,294	6,176	6,116	5,894	5,591
	YoY		-1.9%	12.6%	22.9%	5.2%	9.4%	3.5%	-1.9%	-1.0%	-3.6%	-5.1%
	Sales to external customers		2,008	2,096	2,610	2,600	2,895	3,030	2,971	2,992	2,776	2,643
		YoY	9.0%	4.3%	24.5%	-0.4%	11.3%	4.7%	-2.0%	0.7%	-7.2%	-4.8%
	Inter-segment transaction or transfer		1,811	2,205	2,678	2,960	3,189	3,264	3,206	3,123	3,119	2,948
		YoY	-11.7%	21.7%	21.5%	10.5%	7.7%	2.4%	-1.8%	-2.6%	-0.2%	-5.5%
Segment profit			87	165	121	153	189	148	148	151	143	225
	YoY		428.1%	88.9%	-26.7%	27.0%	23.0%	-21.4%	-0.3%	2.6%	-5.9%	57.6%
	Operating profit margin		2.3%	3.8%	2.3%	2.8%	3.1%	2.4%	2.4%	2.5%	2.4%	4.0%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Source: Shared Research based on company data. Finished materials

Source: Shared Research based on company data. Pre-cutting factory

Real Estate Leasing (0.6% of sales and 7.3% of segment profit in FY03/21)

This segment leases office space, houses, and parking facilities.

Performance of the Real Estate Leasing segment

		FY12/03	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales		335	328	261	281	263	258	263	248	261	266
	YoY	19.6%	-2.0%	-20.3%	7.7%	-6.6%	-1.6%	1.8%	-5.6%	5.2%	2.0%
Segment profit		232	193	133	173	166	155	173	151	172	154
	YoY	32.1%	-16.6%	-31.1%	29.7%	-4.0%	-6.2%	11.0%	-12.3%	13.8%	-10.7%
	Operating profit margin	69.2%	58.9%	51.0%	61.4%	63.1%	60.2%	65.6%	60.9%	65.9%	57.7%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

The company owns and operates buildings and parking facilities near JR Utsunomiya Station. Main leasing properties as of the end of March 2021 were as follows.

Main leasing property