Lead Real Estate Co., LTD. Reports Higher Revenues and Net Income, on the Strength of Rising Real Estate Sales, for the Fiscal Year ended on June 30, 2024
TOKYO, Nov. 21, 2024 (GLOBE NEWSWIRE) — Lead Real Estate Co., LTD. (Nasdaq: LRE), (“LRE” or the “Company”), a Japanese real estate developer of luxury residential properties, including single-family homes and condominiums across Tokyo, Kanagawa prefecture and Sapporo, and which develops and operates the ENT TERRACE brand of extended-stay hotels, today announced financial results demonstrating top line and bottom line year-over-year growth for the fiscal year ended June 30, 2024.
Total Revenue was JPY18.9 billion for the fiscal year ended June 30, 2024, from JPY17.4 billion for the fiscal year ended June 30, 2023.
The major revenue component, Real Estate Sales, increased to JPY18.5 billion from JPY17.1 billion, 8.1% year over year, in the fiscal year ended June 30, 2024.
Significant revenue developments in the fiscal year ended June 30, 2024, include:
- Units of land deliveries for condominiums more than doubled to 33 from 16. However, the Average Sale Price decreased by 21.2% year-over-year to JPY353 million because the number of units sold with low prices increased.
- Units of condominium building deliveries increased to four units delivered from one unit delivered. Average Sale Price decreased by 7.2% year-over-year to JPY33.3 million because the number of units of condominiums with low prices increased.
- Units of single-family home building deliveries increased to 41 units from 39 units. Average Sale Price decreased by 11.2% year-over-year to JPY30.3 million because the single-family homes were in areas with low market value.
- Units of land deliveries for single-family homes decreased to 71 from 88. The average Sale Price decreased by 21.1% year-over-year to JPY76.8 million because the sales were mainly in low-price areas.
- Other revenue increased by 46.3% to JPY463.6 million from JPY316.9 million. This was primarily driven by two hotels, which opened during the previous fiscal year and were in full operation for the most recent fiscal year.
The cost of revenue for real estate sales increased by 8.7% to JPY15.7 billion in the fiscal year ended June 30, 2024, from JPY14.4 billion.
Gross margin slightly decreased to 15.6% in the fiscal year ended June 30, 2024, compared to 15.8% in the fiscal year ended June 30, 2023, primarily driven by the increase in construction costs, such as labor costs and material costs.
Selling, general, and administrative expenses were to JPY2.05 billion from JPY1.81 billion in the fiscal year ended June 30, 2024.
As a result of the foregoing, operating income decreased by 4.3% year-over-year to JPY898.5 million in the fiscal year ended June 30, 2024, from JPY939.2 million in the prior fiscal year, and operating profit margin decreased to 5.0%, from 5.3% in the prior fiscal year.
Interest expenses increased to JPY18.2 million in the fiscal year ended June 30, 2024, from JPY16.7 million in the fiscal year ended June 30, 2023, reflecting a gradual increase in interest rates.
Other income was JPY73.7 million in the fiscal year ended June 30, 2024, compared to other income of JPY6.2 million in the fiscal year ended June 30, 2023, primarily due to the cancellation penalties.
As a result of the foregoing, our net income attributable to ordinary shareholders increased by 2.5% to JPY626.9 million, or JPY46.93 Earnings Per Share in the fiscal year ended June 30, 2024, from JPY611.918 million, or JPY48.96 Earnings Per Share, in the fiscal year ended June 30, 2023.
Cash and cash equivalents were JPY1.3 billion in the fiscal year ended June 30, 2024, compared to JPY786.3 million for the fiscal year ended June 30, 2023.
The number of total ordinary shares outstanding was 13,641,900 and 12,498,900 as of June 30, 2024, and 2023, respectively.
Going forward, the Company feels that its increasing focus on condominium development, rather than single-family home development, will help drive growth.
“It’s great that we were able to grow Revenues and Profits in Fiscal Year 2024,” said Mr. Eiji Nagahara, Lead Real Estate Chief Executive Officer. “Looking ahead, we anticipate exciting developments in Fiscal 2025. It is only recently that developers have focused on the high-end residential market, bringing Tokyo closer to more mature cities like Hong Kong, New York, and London. Also, I believe that our hotel business has been a great success, so I hope to continue growing it. We encourage investors to stay tuned for announcements in the near future.”
For further information on LRE’s Fiscal Year 2024 results, please see the Company’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission at:
https://www.sec.gov/Archives/edgar/data/1888980/000110465924113122/lre-20240630x20f.htm
About Lead Real Estate Co., Ltd
Lead Real Estate Co., Ltd is a Japanese developer of luxury residential properties, including single-family homes and condominiums, across Tokyo, Kanagawa prefecture, and Sapporo. In addition, the Company operates hotels in Tokyo and leases apartment building units to individual customers in Japan and Dallas, Texas.
The Company’s mission is to serve its customers by offering stylish, safe, and luxurious living. The Company’s vision is to adopt the Kaizen (continuous improvement) approach to seek to improve its operations, and to leverage its nationally recognized, award-winning luxury homes and strong market position in the luxury residential property market in Tokyo, Kanagawa prefecture, and Sapporo to create a global transaction platform allowing access to prime Japanese condominiums as well as overseas condominiums, including in the U.S. and Hong Kong.
For more information, please visit the Company’s website at https://www.lead-real.co.jp/en/.
About “ENT TERRACE”
“ENT TERRACE” Series is an extended-stay hotel brand operated by Lead Real Estate Co., Ltd. In 2024, ENT TERRACE AKIHABARA received a 9.5 out of 10 customer rating on Booking.com and won the “Traveller Review Awards,” and all of our properties have been certified as Super Hosts on Airbnb. We will continue to develop our hotels with the aim of providing a space where guests can relax as if they were at home while ensuring privacy and easing the burden of long-term stays.
Learn more at https://ent-terrace.com/en/ and follow us on Instagram, Facebook, and X.
Forward-Looking Statements
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the uncertainties related to market conditions and other factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Contact Information:
For Media and Investor Relations:
Daisuke Takahashi
Chief Financial Officer
Lead Real Estate Co., Ltd
d-takahashi@lead-real.co.jp
+81 3-5784-5127
Skyline Corporate Communications Group, LLC
Scott Powell, President
1177 Avenue of the Americas, 5th Floor
New York, New York 10036
Office: (646) 893-5835
Email: info@skylineccg.com
| LEAD REAL ESTATE CO., LTD | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| AS OF JUNE 30, 2024 AND 2023 | ||||||
| (Japanese yen in thousands, except share data) | ||||||
| June 30, | ||||||
| 2024 | 2023 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | ¥ | 1,300,684 | ¥ | 786,373 | ||
| Accounts receivable, net | 22,859 | 6,613 | ||||
| Real estate inventory | 9,267,825 | 10,390,231 | ||||
| Contract assets | 236,499 | 436,021 | ||||
| Prepaid and other current assets | 493,819 | 299,343 | ||||
| Total current assets | 11,321,686 | 11,918,581 | ||||
| Property and equipment, net | 5,449,101 | 3,302,912 | ||||
| Intangible asset, net | 54,138 | 71,730 | ||||
| Investments in marketable securities | 20,844 | 7,867 | ||||
| Right-of-use assets, operating lease, net | 154,613 | 204,029 | ||||
| Investments | 46,394 | 44,525 | ||||
| Other assets | 170,588 | 186,478 | ||||
| Total assets | ¥ | 17,217,364 | ¥ | 15,736,122 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | ¥ | 602,013 | ¥ | 732,722 | ||
| Current portion of notes payable | 6,815,181 | 5,706,786 | ||||
| Contract liabilities | 130,259 | 260,530 | ||||
| Current portion of operating lease liabilities | 67,938 | 68,771 | ||||
| Accrued expenses and other current liabilities | 356,856 | 355,164 | ||||
| Total current liabilities | 7,972,247 | 7,123,973 | ||||
| Notes payable, net of current portion | 4,598,151 | 5,437,668 | ||||
| Deferred tax liabilities, net | 85,018 | 33,988 | ||||
| Operating lease liabilities, net of current portion | 91,471 | 137,399 | ||||
| Other liabilities | 233,109 | 240,030 | ||||
| Total liabilities | 12,979,996 | 12,973,058 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| SHAREHOLDERS’ EQUITY | ||||||
| Common stock, 50,000,000 shares authorized, 15,628,000 shares issued and 13,641,900 shares outstanding as of June 30, 2024, and 14,485,000 shares issued and 12,498,900 shares outstanding as of June 30, 2023 with no stated par value | 1,206,765 | 344,145 | ||||
| Retained earnings | 3,159,815 | 2,557,854 | ||||
| Treasury stock, at cost, 1,986,100 shares as of June 30, 2024 and June 30, 2023 | -154,121 | -154,121 | ||||
| Non-controlling interest | -7,558 | -6,769 | ||||
| Accumulated translation gain | 32,467 | 21,955 | ||||
| Total shareholders’ equity | 4,237,368 | 2,763,064 | ||||
| Total liabilities and shareholders’ equity | ¥ | 17,217,364 | ¥ | 15,736,122 | ||
| LEAD REAL ESTATE CO., LTD | |||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||
| FOR THE FISCAL YEARS ENDED JUNE 30, 2024, 2023 AND 2022 | |||||||||
| (Japanese yen in thousands, except share and per share data) | |||||||||
| For the Fiscal Years Ended June 30, | |||||||||
| 2024 | 2023 | 2022 | |||||||
| Revenue: | |||||||||
| Real estate sales | ¥ | 18,487,074 | ¥ | 17,098,308 | ¥ | 14,478,498 | |||
| Other revenue | 463,609 | 316,940 | 208,516 | ||||||
| Total revenue | 18,950,683 | 17,415,248 | 14,687,014 | ||||||
| Expenses: | |||||||||
| Cost of sales – real estate | 15,721,271 | 14,466,459 | 12,023,652 | ||||||
| Cost of sales – other | 279,806 | 191,544 | 72,220 | ||||||
| Selling, general and administrative | 2,051,040 | 1,817,970 | 1,704,042 | ||||||
| Total expenses | 18,052,117 | 16,475,973 | 13,799,914 | ||||||
| Operating income | 898,566 | 939,275 | 887,100 | ||||||
| Other income (expense): | |||||||||
| Interest expenses | -18,286 | -16,731 | -23,333 | ||||||
| Other, net | 73,759 | 6,268 | -25,596 | ||||||
| Total other income (expense), net | 55,473 | -10,463 | -48,929 | ||||||
| Income before income taxes | 954,039 | 928,812 | 838,171 | ||||||
| Income taxes | 327,869 | 317,418 | 286,919 | ||||||
| Net income | 626,170 | 611,394 | 551,252 | ||||||
| Net loss attributable to the noncontrolling interests | -789 | -524 | -370 | ||||||
| Net income attributable to common stockholders | 626,959 | 611,918 | 551,622 | ||||||
| Foreign currency translation gain | 10,512 | 5,241 | 19,055 | ||||||
| Total Comprehensive income | ¥ | 637,471 | ¥ | 617,159 | ¥ | 570,677 | |||
| Earnings per share: | |||||||||
| Basic | ¥ | 46.93 | ¥ | 48.96 | ¥ | 44.15 | |||
| Diluted | ¥ | 46.93 | ¥ | 48.96 | ¥ | 44.15 | |||
| Weighted average shares outstanding: | |||||||||
| Basic | 13,360,834 | 12,498,900 | 12,495,486 | ||||||
| Diluted | 13,360,834 | 12,498,900 | 12,495,486 | ||||||
