Investment Bridge Announces Investment Opinion: Bridge Report on Leopalace21 Issued: Strong Growth in First Half Earnings, Continued Growth Expected in Sales, Profits in Full Year FY3/14

Investment Bridge, one of Japan’s leading independent IR services companies, has released a "Bridge Report” on LEOPALACE21 Corporation (TOKYO:8848) reviewing its first half fiscal year March 2014 earnings results and its estimates for full fiscal year March 2014.

• Sales and operating income rose by 5.3% and 183.0% year-over-year during the first half of FY3/14 on the back of a brisk recovery in the construction business and continued high occupancy rates in the leasing business.
• Leopalace21’s earnings estimates for the full fiscal year March 2014 remain unchanged, and call for sales and operating income to grow by 2.9% and 90.2% year-over-year on strength of both the leasing and construction businesses and improvements in overall gross margins resulting from higher sales.
• The Bridge Report highlights the appearance of successful results of Leopalace21’s theme of a "New Growth Stage” inherent in its midterm business plan "Creating Future” reflected in the strong earnings results.

Leopalace21 Corporation conducts construction, leasing, and sales of apartments, condominiums, and other residential properties, in addition to operation of hotels and resorts, and senior citizen care services. Increases in sales of the all of the Company’s divisions during the first half of the current term contributed to total consolidated sales to grow by 5.3% year-over-year to JPY231.6 billion. At the same time, improvement in profitability of the construction business from a loss in the previous term to an operating income of JPY970 million, and a strong 48.8% year-over-year growth in leasing business operating income allowed consolidated operating income to rise by a large 183.0% year-over-year to JPY5.3 billion.

Leopalace21 maintained its existing full year earnings estimates, and calls for sales to increase by 2.9% year-over-year to JPY467.4 billion on increases in all of its divisions with the exception of a marginal decline in sales of its silver (Senior citizen) services business. At the same time, operating income is expected to grow by a large margin of 90.2% year-over-year to JPY14.1 billion due to improvements in overall gross margins resulting from higher sales and strong improvements in profitability of both the leasing and construction businesses. Net income is expected to decline 17.5% year-over-year to JPY11.0 billion due to the disappearance of foreign exchange translation gains and tax adjustments. While Leopalace21 is expected to continue to forgo paying a dividend during the current term, it seeks to reinstate payments at an early stage.

The Bridge Report issued by Investment Bridge highlights the relatively high levels of occupancy rates currently being seen as a reflection of the successful efforts of Leopalace21’s midterm business plan entitled "Creating Future.” The report also calls attention to the announcement of third quarter earnings and further details of occupancy rate trends as indications of how earnings are likely to trend during the remainder of the second half.

To view the full report, please go to the following.
http://www.bridge-salon.jp/report_bridge/archives/eng/8848/20131204.html

About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate and objective information about the earnings, business strategies, and other information of publicly traded Japanese companies.