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Medium-term Management Plan
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Medium-term Management Plan |
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| Perspective of Medium-term Management Plan |
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[Consolidated] Transition of net sales and recurring profit for business divisions (plan)
![[Consolidated] Transition of net sales and recurring profit for business divisions (plan)](plan-3.gif)
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| Point 1: |
[Apartment Construction Subcontracting Business] Plan business from a neutral perspective, rather than based on current conditions |
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The net sales for the Apartment Construction Subcontracting Business in the fiscal year ended March 2007, which is the first fiscal year of the Medium-term Management Plan, has increased significantly due to delays in the construction completion periods for a massive number of projects, as a result of the heavy concentration of projects scheduled for completion in March 2006, the month for financial settlement for the previous fiscal year. If this massive shift in construction completion is not included in the calculation for the amount of net sales at the start of the plan and basing the plan on our current order taking condition in recent years (annual average of about 10%), the scale of net sales for the Apartment Construction Subcontracting Business in the final fiscal year is expected to be \400 billion.
We felt that if this figure was to be incorporated into the plan, however, a critical management issue with consideration for the future in the medium-term period would be buried and lost, since the profitability of the Apartment Construction Subcontracting Business is higher than other business operations. It is for this reason that during the formulation of the current Medium-term Management Plan the sales amount for the Apartment Construction Subcontracting Business did not include prospective income from the current order receiving conditions but rather the plan was formulated from a neutral perspective (sustaining the business at a scale of about \320 billion). |
| Point 2: |
[Leasing Business] Plan growth in business from 10% to 12% annually, through steady accumulation of building contracts |
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Even though the formulation of the plan is based on a neutral perspective for the Apartment Construction Subcontracting Business, the task
of management for most of the apartments, built by this line of business, is consigned to us each year due to the bulk leasing system
requested by apartment owners, which results in a steady increase in the number of our managed apartment units.
When the plan for the transition of net sales for the Leasing Business is formulated based on this current condition with regards to the
number of apartments being managed, it may be possible to secure growth of from 10% to 12% almost every year and therefore \400
billion can be expected by the fiscal year ending March 2011. |
| Point 3: |
[Strategic Three Businesses] Increase ratio of net sales composition to 25% |
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We look ten years and twenty years into the future and strive to make a significant leap towards becoming a “Total Support Enterprise,”
while working to increase the ratio of net sales composition for business operations other than core business. The “strategic three
businesses” are central to this effort. In the fiscal year ended March 2005, which was prior to the inception of this setup, the ratio of sales
composition for those business operations other than core business was a mere 2%. This figure will be improved to about 25% by the fiscal
year ending March 2011, which is the final year of the Medium-term Management Plan, securing a growth base for the future. |
| Point 4: |
Convert business conditions of Leopalace Owners’ Mutual Insurance System and startup of "LEO-REIT" Business |
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Backup plans that involve the utilization of strong complementary elements, such as the conversion of companies into companies
applicable for consolidated accounting through the conversion of the business conditions of the Leopalace Owners' Mutual Insurance
System (planned for the fiscal year ending March 2009), as well as starting “LEO-REIT” Business operations through strategic real estate
investments on a scale of \100 billion, as an alternative means of raising the ratio of net sales composition for business operations other
than core business in the future. In addition, the steadily secured operating revenue of Domestic Hotel Business, as well as the stabilization
of the Overseas Resort Business will continue to be the focus of our efforts and will continue to receive proper support. |
| Point 5: |
Build new profit base to secure ratio of recurring profit to net sales of 10% |
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We will promote aggressive investments through such means as making “Strategic System Investments” (approximately \10 billion), which
will become the foundation for converting the company into a “property asset management company for housing” during the period in which
the Medium-term Management Plan is implemented, on top of the aforementioned “Strategic Real estate Investments” (approximately
\100 billion). In addition, interest-bearing liabilities will be systematically reduced in order to substantialize management without debts for
the purpose of enhancing the financial base.
We will promote the aforementioned business plan in our aggressive investments and activities for a conversion to debt-free management
in order to build a new profit base to secure the ratio of recurring profit to net sales of 10% (consolidated recurring profit for the final fiscal
year to be \100 billion). |
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