HAPPINET CORPORATION (TOKYO, 7552), one of Japan's leading distributors of toys, video and music software, video games, and amusement products, recorded stronger than expected earnings during the first half of fiscal year March 2012 despite various adverse factors including weak capital investments and consumer sentiment brought on by the sluggish economy, as well as disruptions in the supply chain caused by the Great East Japan Earthquake. In spite of these factors, sales and operating income grew by 4% and 86% year-over-year to JPY88.5 and JPY2.3 billion respectively, which compare with initial estimates for sales and operating income of JPY86 and JPY1.35 billion respectively. The stronger sales can be attributed to particularly growth in the toys and amusement business segments of 12% and 32% year-over-year during the first half. At the same time, improvements in profitability in nearly all of its business segments allowed HAPPINET to record a significant improvement in its operating margins to 2.6% from 1.5% in the previous first half.

During the first half total assets rose by JPY1.8 billion from the end of the previous fiscal year to JPY50.3 billion on the back of an increase in current assets of JPY2.4 billion to JPY43.5 billion, which offset a decline in fixed assets of JPY576 million to JPY6.8 billion. Total liabilities grew by JPY633 million to JPY29.3 billion. At the same time net assets grew by JPY1.2 billion to JPY21.0 billion, due in part to a JPY1.3 billion rise in retained earnings and equity ratio rose to 41.8% at the end of the first half from 40.8% at the end of the previous fiscal year.

               

HAPPINET CORPORATION
(7552)

FY3/10 FY3/11 FY3/12E yy chg

1H
FY3/11

1H
FY3/12

yy chg

Sales 194,246 190,891 192,000 0.6% 85,090 88,508 4.0%
Operating Income 2,327 2,855 3,100 8.6% 1,240 2,316 86.8%
Margin 1.2% 1.5% 1.6% - 1.5% 2.6% -
Ordinary Income 2,513 3,013 3,200 6.2% 1,314 2,422 84.2%
Net Income 1,179 1,376 1,600 16.2% 712 1,526 114.2%
Earnings Per Share 104.6 122.56 71.42 na 31.81 68.14 na
Total Assets 49,050 48,507 na na 48,507 50,392 na
Net Assets 18,962 19,802 na na 19,802 21,053 na
Equity Ratio 38.7% 40.8% na na 40.8% 41.8% na
Dividend Per Share 30.0 30.0 33.75 - 15.0 22.5 -

(Units:  Million Yen, Dividends and Earnings per Share in Yen)

 

Despite this strong earnings performance during the first half, HAPPINET maintains its outstanding estimates for the full year to March 2012 initially announced on May 11, 2011 due to various uncertainties that continue to plague its operating environment. Consequently HAPPINET calls for sales and operating income to 0.6% and 8.6% year-over-year to JPY192 and JPY3.1 billion respectively.

HAPPINET CORPORATION was originally founded in 1969 and is now one of the Japan's leading distributors of toys, video and music software, video games, and amusement products. The current name HAPPINET was assumed in 1991 when it underwent a merger with two other Bandai wholesalers with the goal of implementing strategies to cope with changing distribution systems to match changes in the market.

Kaoru Hosaka for information regarding HAPPINET CORPORATION
Investment Bridge Co., Ltd.
+81-3-5842-5765 (Japanese correspondence only)
happinet@cyber-ir.co.jp (English and Japanese correspondence)