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Japan – Alpha Group’s profits slump

06 November 2013

Japanese temporary recruitment firm Alpha Group (3322: JP) reported revenue of JPY 12.7 billion (USD 129 million) for the first half of the year ending 30 September 2013, an increase of +16.5% compared with JPY 10.9 billion (USD 110.7 million) last year.

Despite increased revenue, year-on-year, the company reported a -52.4% drop in operating profit for the six months, falling from JPY 248 million (USD 2.5 million) in H1 2012 to JPY 118 million (USD 1.2 million) this year. Pre-tax profit for the period also failed to surpass last year’s performance, dropping by -54.9% to JPY 112 million (USD 1.1 million) from JPY 249 million (USD 2.5 million).

Gross profit for the period dropped substantially from JPY 154 million (USD 1.6 million) to JPY 30 million (USD 304,705), year-on-year, equating to a fall of -80.4%.

Alpha Group had expected to report a tough half year, according to the company’s earlier forecast. In addition to surpassing their revenue expectation of JPY 10.5 billion (USD 106.6 million) for the first half of the year, the company’s operating profit had been predicted to fall to JPY 100 million (USD 1 million). Pre-tax profit results also surpassed muted expectations of JPY 95 million (USD 964,905). Net profit, however, failed to achieve the earlier forecast of JPY 39 million (USD 396,120).

Looking forward, Alpha Group has forecast revenue of the year ending 31 March 2014 of JPY 25.5 billion (USD 259 million). Operating profit is expected to reach JPY 330 million (USD 3.4 million), with a pre-tax profit of JPY 300 million (USD 3.1 million). Net profit for the year is forecast to reach JPY 148 million (USD 105 million).

Alpha Group provides temporary staffing services; in addition to sales promotion, the selling of mobile devices, and the selling of stationery.  

In trading today, the company’s share price rose +14.9% to JPY 1,824 (USD 18.53), an increase of +193.4% compared with a year ago. Based on its share price, the company has a current market value of JPY 5.7 billion (USD 57.9 million).   

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