To Our Shareholders and Investors (2022)
Excerpt from the notice of convocation of the 17th Ordinary General Meeting of Shareholders
TO BE THE NEW STANDARD Aiming for 300,000 active stores and a top share of the POS market in Japan
In terms of consolidated financial results for the fiscal year ended April 30, 2022, with net sales of 4,296 million yen (+29.2% YoY), and operating profit of 636 million yen (-24.7% YoY; operating profit margin of 14.8%), the company successfully overcame the COVID-19 pandemic-induced slump to achieve significant growth. I would like to express my deepest gratitude to all our shareholders for your continued support.
This fiscal year was the first year of our Medium-Term Management Plan, and we were prepared for reduced revenues ー actually moved to reduce revenues, and also increased sales and marketing expenses (S&M). Ultimately we were able to outperform our initial target for annual recurring revenue (ARR) of 2.7 billion yen, with a result of 2.92 billion yen. There are two major factors behind this success.
The resumption of publicity activities
The first is the resumption of publicity activities that we had temporarily halted during the pandemic. Using the funds raised at the time of our listing, we have been actively engaged in various publicity activities, including through TV commercials, owned media, radio programs, and cosponsored food festivals, working to speed up the process of raising awareness and acquiring new customers. As this was our very first foray into such marketing initiatives the past year has been one of continual trial and error, but I feel that these initiatives have finally taken shape. From the next fiscal year onwards we will continue to further polish our marketing initiatives and implement cost-effective advertising campaigns.
The strengthening of our payment services business
The second factor behind our success in realizing our ARR target is the strengthening of our payment services business. In particular, the acquisition of payment service company ROYAL GATE INC. in December 2021 was a major topic that directly contributed to the increase in ARR. ROYAL GATE INC. has an outstanding service platform capable of processing a wide variety of payments on a single terminal, including credit card, e-money, QR, and overseas money payments, and we anticipate that by combining this platform with Smaregi we can significantly enhance our service level. Looking ahead, we intend to focus on payment services and further expand our activities in this area.
Although constant news and updates about the global pandemic and the situation in Ukraine mean that society remains in an extremely precarious state, during the current fiscal year we plan to continue to focus on investments that will ensure continuous high growth, while also maintaining a robust management policy. As set out in our Medium-Term Management Plan, based on the slogan “TO BE THE NEW STANDARD,” we will work to accelerate growth and promote our business to secure the top share of the POS market, and in specific terms expand to more than 300,000 active stores in Japan. I ask for the continued support and encouragement of our shareholders in this endeavor.
July 2022
Hiroshi Yamamoto
