To Our Valued Shareholders
41th Annual Business Activity and Financial Results (March 1, 2017 - February 28, 2018)
First of all, we would like to thank you very much for your continued support of KOHNAN SHOJI CO., LTD.
During the above mentioned term, the Japanese economy has been gradually recovering due to various government policies as well as improvements in overseas economies. There have also been improvements in corporate performance and employment, despite weak personal consumption due to the sluggish growth in disposal income.
Under these circumstances, in the final year of the first medium-term management plan “We love KOHNAN 2017”, we have continued to actively promote our initiatives of “revitalization of existing stores” and “reduction of merchandise”. As a result, we achieved record highs in sales, ordinary income, and current net income.
With regard to store development, we have opened four Home Center stores and six PRO stores. Additionally, we have acquired all shares of BEAVERTOZAN CO., LTD., which runs Home Center stores in Kanagawa and Tokyo, and made them a wholly owned subsidiary of our company. Overall, as of February 28, 2018, there are now a total 336 stores (272 Home Center stores and 64 PRO stores).
As for business results, thanks to the new stores and the positive effects of a consolidated subsidiary of BEAVERTOZAN CO.,LTD., net sales were 302 billion 207 million yen (up 3.8% year-over-year on non-consolidated basis). Due to improvement in gross profit margins, gross profit was 111 billion 468 million yen (up 4.6% year-over-year). Operating income was 17 billion 372 million yen (up 8.0% year-over-year) and ordinary income was 16 billion 170 million yen (up 11.0% year-over-year). Due to a decrease in the impairment loss, net income rose to 10 billion 31 million yen (up 65.2% year-over-year).
40th Anniversary of its Founding and Achieving Further Progress as the Start of the Second Medium-Term Management Plan
Fiscal year 2018 marks a milestone year - the 40th anniversary of our foundation. It also starts the second medium-term management plan “We Love KOHNAN so much !! ”. We have continued to pursue high profits by expanding sales volume. Moreover, we have further strengthened our financial constitution to increase enterprise value in this year of great breakthrough. Based on customers’ feedback, we endeavor to enhance the competitiveness of our goods in price as well as quality. Furthermore, we strive to create attractive stores that will be loved by local communities in all aspects, including a wide selection of goods and services. We also aim to achieve the sustainable growth.
Higher Returning Profits to Our Shareholders
We recognize it as a priority of business management to return our profits actively and appropriately to our shareholders. We consider it our fundamental policy to keep our dividends stable for the long term while comprehensively considering the performance forecasts and the total level of internal reserves.
With this policy in mind, considering business results, we have decided to pay 50 yen per share to our valued shareholders for the annual dividend, comprising an interim dividend of 25 yen per share and a year-end dividend of 25 yen per share. This is a 6- yen increase from the prior annual dividend to maximize shareholders’ value. We have now increased our dividend for four consecutive years. We hope and believe we have been able to meet the expectations of all shareholders.
In closing, thank all of our shareholders for your continued support of KOHNAN SHOJI CO., LTD.
May 25th, 2018
KOHNAN SHOJI CO., LTD.
PRESIDENT, Naotaro Hikida