■Performance Trends
2. Segment Trends
(1) Gakushuku business
Although sales of the learning cram school business of Riso Education ＜4714＞ hit a record high of 16,830 million yen, up 1.9% from the previous fiscal year, operating profit decreased 24.9% from the same period to 837 million yen due to the opening of new school buildings and an increase in renewal construction costs. Regarding school building development, “TOMAS” opened 1 school (Nakameguro School) in the 1st quarter, 3 schools (Kachidoki School, Jiyugaoka School Building 2, Ochanomizu School) in the 3rd quarter, and 1 new school (Funabashi School) in the 4th quarter, and carried out floor expansion/relocation renewal at 3 schools in the 1st quarter and 2 schools in the 2nd quarter. As of the end of 2024/2, the number of school buildings for “TOMAS” was 98, an increase of 5 schools compared to the end of the previous term, and “Inter TOMAS” remained flat with 12 schools, “Medic TOMAS” 4 schools, and “Spec.tomas” 1 school, respectively.
The number of students at the end of the term decreased 0.3% from the end of the previous semester, and a slight downward trend continued, but an increase in sales was secured due to the effects of tuition price increases from 2023/3 onwards. There was no change in the composition ratio of elementary school students, middle school students, and high school students, and sales per student in 2024/2 increased 2.1% from the same month last year. The company selected priority school buildings and strengthened sales in order to increase the number of students. A priority school building indicates a school building where the number of students that can be acquired falls below expectations in response to potential demand in a trade area. As a specific initiative, customer satisfaction was improved by closely communicating such as interviews with parents and telephone visits, and efforts were made to improve the withdrawal rate. It seems that the results of these efforts are gradually beginning to appear, and the rate of decline in the number of students has been shrinking since the 2.1% decrease at the end of the 2nd quarter, and it is expected that it will turn to increase after the spring of 2024.
(2) Private teacher dispatch education business
Although sales of the tutor dispatch education business declined slightly to 5,028 million yen, down 0.8% from the previous fiscal year, operating profit increased 47.1% to 421 million yen due to efforts to review advertising costs and various expenses, turning into an increase in profit for the first time in four fiscal years. Due to the effects of the declining birthrate in rural areas, the number of students at the end of the semester decreased by 9.4% compared to the end of the previous term, which led to sluggish sales growth. Sales per student as of 2024/2 increased 9.6% from the same month last year due to an increase in tuition fees and an increase in the number of students at the “Medic Prestige Association,” which has a large sales unit price.
Regarding school building development, the “Meimonkai” opened 1 new school (Kyoto Ekimae School Building 2) in 2023/4, and 6 schools were consolidated into 3 schools. Also, 1 school (Hamamatsu school) closed in the 4th quarter due to “TOMEIKAI.” As a result, the number of school buildings at the end of the term was 35, with “Meikai” reduced by 2 schools compared to the end of the previous term, to 11 schools with “TOMEIKAI” reduced by 1 school, and in addition, “Medic Prestige Association” became 2 schools. As for regional bases, the declining birthrate is expected to continue, so it is a policy to concentrate around metropolitan areas (Tokyo, Osaka, Nagoya, Fukuoka) and continue management with an emphasis on profitability.
(3) Early childhood education business
Sales in the early childhood education business fell 1.2% from the previous fiscal year to 5,713 million yen, and operating profit declined 17.4% to 584 million yen, for the second consecutive term. The reason is that the number of students at the end of the semester decreased by 2.4% compared to the end of the previous semester, and the downward trend continued. Although the number of “Shinme's Club” increased steadily, mainly among school children, it was seen that the main “Shinme Club” decreased by about 14%, and it looked like they were dragging their feet. Sales per student in 2024/2 increased 1.6% from the same period, partly due to the effect of the “Shinmekai” tuition price increase.
As for “Shinmekai,” it seems that market share is declining as demand for entrance exams for private kindergartens and elementary schools changes actively. The company believes that there is insufficient manpower due to the rapid increase in the number of students in the 2022/2 fiscal year, and the decline in customer satisfaction is the cause of the decline in market share, and in the 2024/2 fiscal year, they have been working to improve customer satisfaction by thorough planned individual interviews and implementing classroom sales, etc., but it seems that expected results have not been obtained as competition for student acquisition intensifies. From the 2025/2 fiscal year, improvements such as drastically reviewing conventional processes are being promoted due to the renewal of the management team.
As for school building development, in addition to opening 1 “Shinme's Club School” school (Futakotamagawa School) and 1 “Konami Sports Shinme's Academy” (Nishinomiya School) each in the first quarter, 1 classroom of “Shinme Kai” was relocated and renewed, and the “Konami Sports Shinme's Academy” (Shinagawa School) was expanded and renewed. Also, 2 “Shinmekai” classrooms (Shijo Karasuma classroom, Nishinomiya Kitaguchi classroom) were closed in the 3rd quarter. As a result, the number of school buildings at the end of the term “Shinmekai” decreased by 2 classrooms compared to the end of the previous term, “Shinme's Club School Children” increased by 1 school to 19 schools, “Shinme's Club Daycare” remained flat at 8 schools, and “Konami Shinme's Club Academy” increased by 1 school to 2 schools.
(4) In-school tutoring business
Sales of the in-school tutoring business increased 13.8% from the previous fiscal year to 2,925 million yen, and operating profit increased 14 times to 306 million yen, breaking record highs. The number of schools in operation remained at 82 schools, a decrease of 4 schools compared to the end of the previous term due to the promotion of unprofitable schools (10 schools), but the number of students enrolled increased due to the contribution of new contract schools and the expansion of the number of operating school years at existing schools. Also, the fact that average monthly sales per school building rose 16.0% from the previous fiscal year to approximately 2.8 million yen was a factor in the increase in profit margins. The number of school buildings with monthly sales of 3 million yen or more, which the company has set as a target for obtaining proper profits, accounts for 46% of the total as of 2024/2, with 38 schools, an increase of 8 schools compared to the previous fiscal year (35% in the first semester), and of these, the number of school buildings that were 5 million yen or more also increased by 1 school, showing that the number of students using the company's services is steadily expanding.
(5) Personality and emotional training camp education business
Sales of the personality and emotional training camp education business increased 10.9% from the previous fiscal year to 1,699 million yen, and operating profit increased 26.1% from the same period to 13 million yen. The number of experiential tours held and participants recovered as the COVID-19 pandemic subsided, and “TOMAS Gymnastics School” and “TOMAS Soccer School” also remained steady, and sales surpassed pre-COVID-19 levels (1,669 million yen for the 2020/2 fiscal year) and hit a record high. In terms of school building development, 1 new “TOMAS gymnastics school” was opened to become 11 schools, and there are 5 “TOMAS soccer schools” and 2 barschule classrooms.
(Author: FISCO Visiting Analyst Joe Sato)