Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 [J-GAAP]
May 14, 2021 | |||
Name of listed company: | ARTNATURE INC. | Listed on: Tokyo Stock Exchange | |
Securities code: | 7823 | URL: https://www.artnature.co.jp/english/index.html | |
Representative: | Yoshikata Igarashi, Chairman and President | ||
Contact: | Hiroaki Inoue, General Manager, Finance & Accounting Division | TEL: +81-3-3379-3334 | |
Senior Corporate Officer | |||
Scheduled date of the ordinary general meeting of shareholders: | June 23, 2021 | ||
Scheduled date of the start of dividends distribution: | June 24, 2021 | ||
Scheduled date of the filing of the financial report: | June 24, 2021 | ||
Supplementary documents for this summary of financial statements: | None | ||
Financial results explanatory meeting: | Yes (for institutional investors and analysts) |
(Figures shown are rounded down to the nearest million yen.)
1. Consolidated results for the fiscal year ended March 31, 2021 (April 1, 2020 - March 31, 2021)
(1) Consolidated operating results | (Percentage figures show change from the previous year.) | ||||||||||
Net income attributable | |||||||||||
Net sales | Operating income | Ordinary income | to owners of the parent | ||||||||
company | |||||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||||
Year ended March 31, 2021 | 35,868 | (9.2) | 1,932 | (33.8) | 2,005 | (33.3) | 840 | (45.5) | |||
Year ended March 31, 2020 | 39,484 | 3.9 | 2,919 | (9.5) | 3,006 | (9.1) | 1,542 | (17.3) |
Note: Comprehensive income: Year ended March 31, 2021: ¥980 million (-37.7%) | Year ended March 31, 2020: ¥1,573 million (-10.7%) | ||||||
Net income per | Fully diluted net | Return on | Ordinary income | Operating income | |||
share | income per share | shareholders' equity | to total assets | to net sales | |||
Yen | Yen | % | % | % | |||
Year ended March 31, 2021 | 25.99 | 25.75 | 3.3 | 4.6 | 5.4 | ||
Year ended March 31, 2020 | 47.40 | 47.07 | 6.2 | 7.0 | 7.4 |
(Reference) Equity in earnings of affiliates: Year ended March 31, 2021: ¥‒ million Year ended March 31, 2020: ¥‒ million
(2) Consolidated financial position
Total assets | Net assets | Shareholders' equity | Net assets per share | |||
ratio | ||||||
Millions of yen | Millions of yen | % | Yen | |||
As of March 31, 2021 | 44,919 | 25,255 | 55.8 | 781.00 | ||
As of March 31, 2020 | 43,163 | 25,337 | 58.3 | 777.92 | ||
(Reference) Equity capital: As of March 31, 2021: ¥25,066 million | As of March 31, 2020: ¥25,179 million |
(3) Consolidated cash flows
Cash flows from | Cash flows from | Cash flows from | Cash and cash equivalents | |
operating activities | investing activities | financing activities | at end of year | |
Millions of yen | Millions of yen | Millions of yen | Millions of yen | |
Year ended March 31, 2021 | 4,232 | (885) | (1,112) | 18,984 |
Year ended March 31, 2020 | 2,516 | (2,299) | (1,463) | 16,736 |
2. Dividends
Dividends per share | Dividend | Dividends on | ||||||||
First | Second | Third | Total dividends | |||||||
payout ratio | net assets | |||||||||
quarter- | quarter- | quarter- | Year-end | Annual | (annual) | |||||
(consolidated) | (consolidated) | |||||||||
end | end | end | ||||||||
Yen | Yen | Yen | Yen | Yen | Millions of yen | % | % | |||
Year ended March 31, 2020 | ‒ | 14.00 | ‒ | 14.00 | 28.00 | 908 | 59.1 | 3.6 | ||
Year ended March 31, 2021 | ‒ | 14.00 | ‒ | 14.00 | 28.00 | 902 | 107.7 | 3.6 | ||
Year ending March 31, 2022 | ‒ | 14.00 | ‒ | 14.00 | 28.00 | 86.0 | ||||
(Forecast) | ||||||||||
3. Consolidated financial forecast for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022)
(Percentage figures show changes from the previous year.)
Net income | Net income per | ||||||||||
Net sales | Operating income | Ordinary income | attributable to owners | ||||||||
share | |||||||||||
of the parent company | |||||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | |||
Full year | 40,363 | 12.5 | 2,023 | 4.7 | 2,088 | 4.1 | 1,045 | 24.3 | 32.56 |
Notes:
- Significant changes to subsidiaries during the term (Transfers of specific subsidiaries with changes in the scope of consolidation): None
- Changes in accounting policies, accounting estimates and restatement of revisions
1) | Changes in accounting policies due to revision of accounting standards, etc.: | None |
2) | Changes in accounting policies other than 1): | None |
3) | Changes in accounting estimates: | None |
4) | Restatement of revisions: | None |
(3) Number of outstanding shares (common stock):
1) Number of shares issued and outstanding (including treasury shares)
2) Number of treasury shares
3) Average number of shares issued and outstanding in each period
34,393,200 | shares | As of March 31, 2020 | 34,393,200 | shares |
2,297,539 | shares | As of March 31, 2020 | 2,026,239 | shares |
32,340,543 | shares | Year ended March 31, 2020 | 32,536,418 | shares |
- This kessan tanshin document is outside the scope of the audit procedures conducted by certified public accountants or the independent auditor.
-
Explanation of the appropriate use of financial results forecasts; other important items
(Cautionary statement regarding forward-looking statements, etc.)
Forward-looking statements in this document, including forecasts, are based on information available at the time of disclosure and on certain assumptions deemed reasonable by the Company. Actual results may differ materially from forward-looking statements due to a number of factors. For more information about these assumptions and other conditions that form the basis of these forecasts, please see page 3 of the supplementary materials, "1. Analysis of operating results, etc., (4) Business forecasts."
Contents | ||
2. Management policies ................................................................................................................................................................ | 4 | |
(1) | Basic management policy..................................................................................................................................................... | 4 |
(2) | Management indicators and targets ...................................................................................................................................... | 4 |
(3) | Medium- and long-term management strategy..................................................................................................................... | 4 |
(4) | Issues to be resolved............................................................................................................................................................. | 4 |
3. Basic position on the selection of accounting standards........................................................................................................ | 5 | |
4. Consolidated financial statements and related notes............................................................................................................. | 6 | |
(1) | Consolidated balance sheets ................................................................................................................................................. | 6 |
(2) | Consolidated statements of income and comprehensive income.......................................................................................... | 8 |
(Consolidated statements of income) ................................................................................................................................... | 8 | |
(Consolidated statements of comprehensive income) .......................................................................................................... | 9 | |
(3) | Consolidated statements of changes in net assets ............................................................................................................... | 10 |
(4) Consolidated statements of cash flows ............................................................................................................................... | 12 | |
(5) | Notes on consolidated financial statements ........................................................................................................................ | 14 |
(Notes related to the going concern assumption) ............................................................................................................... | 14 | |
(Segment information, etc.) ................................................................................................................................................ | 14 | |
(Per share information)....................................................................................................................................................... | 16 | |
(Significant subsequent events) .......................................................................................................................................... | 16 |
1
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2021
1. Analysis of operating results, etc.
(1) Analysis of operating results
In fiscal 2021, which ended March 31, 2021, the COVID-19 pandemic significantly limited economic activity in Japan, leading to a deterioration in corporate earnings and business confidence and a slump in consumer spending. The economic outlook remains extremely uncertain because, despite the beginning of vaccination and the implementation of other measures, it is not yet possible to predict when the pandemic will end as the number of new infections continues to rise and fall in waves.
Against this backdrop, ARTNATURE INC. and its consolidated subsidiaries (the ARTNATURE Group) formulated and began to implement ARTNATURE Challenge Plan, the new three-yearmedium-term management plan, starting in fiscal 2021.
Under the plan, we aim to strengthen the ARNATURE Group's position in existing businesses and further expand new businesses to build the foundations for a new ARTNATURE capable of opening up the next phase in the Group's history.
Specifically, we are implementing six priority challenge initiatives: (1) grow the Group's earnings, (2) develop new business fields, (3) reinforce recruitment, (4) cultivate human resources, (5) encourage dialogue with capital markets, and (6) drive business innovation. At the same time, we have been taking thorough measures to prevent COVID-19 infections in the implementation of business activities.
Earnings in the first half of the fiscal year were significantly impacted by the suspension of production activities in the Philippines and by the temporary closure of some stores in Japan due to the COVID-19 pandemic, but sales and profits both increased year on year in the second half of the fiscal year as the impact of those factors waned. As a result, consolidated net sales in fiscal 2021 declined 9.2% year on year to ¥35,868 million. The Group took steps to curb advertising costs and other selling expenses and found savings in other administrative expenses, but that was insufficient to offset the impact of the decline in sales in the first half of the fiscal year. As a result, operating income declined 33.8% year on year to ¥1,932 million, ordinary income fell 33.3% to ¥2,005 million, and net income attributable to owners of the parent company declined 45.5% to ¥840 million.
Men's business
Sales in the men's business declined 4.7% year on year to ¥21,322 million, mainly reflecting a slump in sales of custom- made wigs due to the temporary closure of production sites in the Philippines during the COVID-19 pandemic and other factors.
Ladies' business
Sales in the ladies' business fell 20.4% year on year to ¥9,344 million. In addition to the temporary closure of production sites in the Philippines, the ladies' business was also affected by reduced store operating hours, a decline in customer traffic and other factors.
Ladies' ready-made wigs business
Sales in the ladies' ready-made wigs business declined 6.7% year on year to ¥3,715 million, reflecting factors such as the temporary closure of the retail facilities in which the Company's stores are located.
-
Analysis of financial position
(Assets)
As of the fiscal year-end, total assets were ¥44,919 million, an increase of ¥1,756 million compared with the end of the previous fiscal year. Current assets increased ¥2,033 million, mainly due to an increase in cash and deposits and merchandise and finished goods, while non-current assets declined ¥277 million, primarily reflecting a drop in property, plant and equipment and in intangible assets.
(Liabilities)
As of the fiscal year-end, liabilities totaled ¥19,664 million, an increase of ¥1,838 million compared with the end of the previous fiscal year. Although accounts payable - other declined, current liabilities rose ¥1,624 million, mainly due to increases in advances received and income taxes payable. In addition, non-current liabilities increased ¥214 million, primarily reflecting an increase in net defined benefit liability.
(Net Assets)
As of the fiscal year-end, net assets totaled ¥25,255 million, a decrease of ¥82 million compared with the end of the previous fiscal year. This largely reflected a decrease in retained earnings and an increase in treasury shares.
2
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2021
(3) Analysis of cash flows
As of the fiscal year-end, cash and cash equivalents (cash) totaled ¥18,984 million, an increase of ¥2,247 million compared with the end of the previous fiscal year. The Company's cash flow position and factors behind the changes in cash flows were as follows:
(Cash flows from operating activities)
Operating activities provided net cash of ¥4,232 million, compared with ¥2,516 million in the previous fiscal year. This mainly reflected income before income taxes of ¥1,647 million, depreciation of ¥937 million, impairment loss of ¥359 million, increase in net defined benefit liability of ¥201 million and increase in advances received of ¥1,194 million, versus income taxes paid of ¥539 million and increase in inventories of ¥100 million.
(Cash flows from investing activities)
Investing activities used net cash of ¥885 million, compared with ¥2,299 million in the previous fiscal year. This mainly reflected purchase of property, plant and equipment of ¥720 million, purchase of intangible assets of ¥134 million, and purchase of investment securities of ¥180 million.
(Cash flows from financing activities)
Financing activities used net cash of ¥1,112 million, compared with ¥1,463 million in the previous fiscal year. This mainly reflected purchase of treasury shares of ¥206 million and cash dividends paid of ¥905 million.
The Group's cash flow-related indicators are as follows:
Year ended March 31, | 2017 | 2018 | 2019 | 2020 | 2021 |
Equity ratio (%) | 58.5 | 58.6 | 57.4 | 58.3 | 55.8 |
Market value-based equity ratio (%) | 59.2 | 57.0 | 48.0 | 48.2 | 50.4 |
Cash flows to interest-bearing debt (%) | 27.9 | 21.7 | 9.0 | ‒ | ‒ |
Interest coverage ratio (times) | 468.3 | 566.6 | 1,161.7 | 1,980.5 | 492.6 |
Notes: The above indicators are calculated as follows:
Equity ratio: | Equity capital / total assets |
Market value-based equity ratio: | Market capitalization / total assets |
Cash flow to interest-bearing debt: | Interest-bearing debt / cash flow from operating activities |
Interest coverage ratio: | Cash flows from operating activities / interest payments |
- All indicators are calculated using consolidated financial data.
- Market capitalization is calculated by multiplying the number of shares outstanding at the fiscal year end (excluding treasury shares) by the closing share price at the fiscal year end.
- Cash flow is "Cash flows from operating activities" shown on the consolidated statements of cash flows.
-
Interest-bearingdebt is all liabilities on which interest is paid shown under liabilities on the consolidated balance sheet.
Interest payments are "Interest paid" shown on the consolidated statement of cash flows.
- Business forecasts
In fiscal 2022, which ends March 31, 2022, the Group's operating environment is likely to remain challenging, due mainly
to intensifying competition from companies in the same sector and from new market entrants from peripheral and other sectors. Against this backdrop, the Group has formulated a new medium-term management plan, the ARTNATURE Challenge Plan, and began to implement it in fiscal 2021. During the three years of the plan, the Group aims to enhance our position in existing business fields and expand the reach of new businesses to build the foundation for a new ARTNATURE capable of opening up
the next phase in the Group's history.
Based on these initiatives, for fiscal 2022, we forecast consolidated net sales of ¥40,363 million, up 12.5% year on year, operating income of ¥2,033 million, up 4.7%, ordinary income of ¥2,088 million, up 4.1%, and net income attributable to owners of the parent company of ¥1,045 million, up 24.3%.
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Basic policy for the distribution of profits and dividends for fiscal 2021 and fiscal 2022
ARTNATURE Group believes that returning profits to shareholders is one of the most important management issues. The
Company's basic policy is to pay stable dividends to shareholders while ensuring it retains sufficient internal reserves to reinforce the Group's management base and financial position and to invest in the future expansion of business.
In line with this policy, the Company will pay a full-year dividend of ¥28 per share for fiscal 2021, comprised of an interim dividend of ¥14 per share and a year-end dividend of ¥14 per share.
For fiscal 2022, the Company plans to pay a full-year dividend of ¥28 per share, comprised of an interim dividend of ¥14 per share and a year-end dividend of ¥14 per share.
3
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Artnature Inc. published this content on 14 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2021 14:46:04 UTC.