For details, please refer to "Summary of Financial Information and Consolidated Business Results for the Year Ended March 31, 2019"
|(Unit: Millions of yen)||Year ended March 31, 2018||Year ended March 31, 2019||YoY Change %|
|Profit attributable to owners of parent||(7,691)||(298)||-|
|(Unit: Millions of yen)||Year ended March 31, 2018||Year ended March 31, 2019||Increase /
|Total current assets||42,175||48,225||6,049|
|Total non-current assets||30,160||19,971||(10,189)|
|Total current liabilities||22,480||21,754||(726)|
|Total non-current liabilities||14,346||11,337||(3,009)|
|Total net assets||35,509||35,105||(403)|
|Total liabilities and net assets||72,336||68,196||(4,139)|
|(Unit: Millions of yen)||Year ended March 31, 2018||Year ended March 31, 2019||Increase /
|Cash flows from operating activities||(1,094)||2,178||3,273|
|Cash flows from investing activities||4,399||3,217||(1,181)|
|Cash flows from financing activities||(2,021)||(962)||1,059|
|Effect of exchange rate change on cash and cash equivalents||(0)||0||0|
|Net increase (decrease) in cash and cash equivalents||1,282||4,434||3,151|
|Cash and cash equivalents at beginning of period||23,090||24,373||1,282|
|Cash and cash equivalents at end of period||24,373||28,807||4,434|
i.) Overview of consolidated business results
During the fiscal year ended March 31, 2019, the FIELDS CORPORATION Group substantially changed direction by promoting large-scale management reforms through a management structure centered on its four core companies. Accordingly, we strictly enforced a variety of policies aimed at increasing management efficiency in order to optimize management costs.
In the pachinko and pachislot (hereinafter, “PS”) business, the nucleus of which is formed by FIELDS CORPORATION, we returned to our original role as a distributor and focused on further expanding our distribution base through the enhancement of our marketing functions, which are one of its major strengths. Efforts aimed at achieving this expansion included, of course, concentration on sales of new machines and the launching of new businesses capable of responding to diverse customer needs.
In the PS market environment during the fiscal year under review, the Amendment of the Regulation for Enforcement of the Amusement Businesses Law* went into effect on February 1, 2018. Under this market environment, manufacturers actively developed and launched PS machines that were compliant with new regulations (hereinafter, “new-regulation machines”). New-regulation pachinko machines were launched in August, followed by new-regulation pachislot machines in October. These machines, which have been well-received by both pachinko halls and PS fans alike, feature varied game functions and can be enjoyed with peace of mind while limiting spending to an appropriate amount. Against this backdrop, the market saw further increases in demand for new-regulation PS machines. In this environment, the number of manufacture applications for model certification tests increased rapidly during the second half of the fiscal year under review, rising to the point at which the very process of receiving them became difficult. This, as well as other factors, such as stagnation in the model certification test passing ratio caused by stricter standards, contributed to sluggish supply of titles to the market.
Under these conditions, we endeavored to achieve its full-year targets while holding on to several titles waiting for approval in accordance with model certification tests. However, we postponed sales for a portion of titles that required more time than anticipated between the receipt of test applications and subsequent approval. As a result, the number of PS machines sold during the fiscal year under review fell by 53,000 units YoY, to 138,000.
Tsuburaya Productions Co., Ltd. (hereinafter, “Tsuburaya Productions”), a company at the center of the IP business of the Group, promoted strategic expansion overseas through measures such as video distribution of the new animated feature ULTRAMAN in North America and China in an effort to become a global entertainment company grounded in its brand strategy. Accordingly, Tsuburaya Productions energetically worked to maximize its domestic monetization infrastructure and form strategic alliances.
In addition, Digital Frontier Inc. (hereinafter, “Digital Frontier”), which operates the Group’s video business, focused on the production of new video titles, such as the original TV anime The Magnificent Kotobuki, which was developed jointly with partnering companies. It also promoted the acceptance of video production orders globally, primarily in China.
The consolidated operating performance for the fiscal year under review included net sales of ¥51,639 million (down ¥9,416 million YoY), an operating loss of ¥1,363 million (a YoY improvement of ¥4,375 million), and an ordinary loss of ¥1,396 million (a YoY improvement of ¥3,808 million). Additionally, the Company posted ¥298 million in loss attributable to owners of parent, an improvement of ¥7,392 million YoY that was due to the recording of extraordinary income such as gains on sales of shares of subsidiaries and associates and gains on step acquisitions.
The consolidated business results detailed above have been impacted by the Group’s decision to record licensing royalty revenues of about ¥1,600 million, which were projected for the fiscal year under review, in April 2019 and after when fees corresponding to these sales are collected. More details can be found in the "Notification of differences between the consolidated performance forecast and actual results for the year ended March 31, 2019, and differences between the non-consolidated results for the year ended March 31, 2019 and the results for the previous fiscal year", dated May 15, 2019.
*: Regulation Partially Amending the Ordinance for Enforcement of the Act on Control and Improvement of Amusement Business and the Regulations for the Verification of Licenses, Formats and Other Aspects of Pachinko and Pachislot Machines, which were enforced on February 1, 2018.
ii.) Forecast for the year ending March 31, 2020
Profit plan for the year ending March 31, 2020
|(Unit: Millions of yen)||Results of FY3/2018||Results of FY3/2019||Forecast of FY3/2020|
|Profit(loss) attributable to owners of parent||(7,691)||(298)||+7,392||1,000||+1,298|
The FIELDS CORPORATION Group considers focus on its core PS business and the growth of Tsuburaya Productions to be its most important issues in terms of business promotion during the fiscal year ending March 31, 2020.
In the PS business, at the center of which is FIELDS CORPORATION, we will demonstrate the results of our thorough product analysis and marketing. We will also focus on the planning, development and sale of optimal products that will entertain fans and make welcome additions to pachinko halls.
On the other hand, we have taken great care to ensure the careful and precise inclusion of possible impact from lead times between receipt of applications for model certification tests mandated by the Security Communications Association and subsequent model approvals in our earnings forecasts for the PS business in the fiscal year ending March 31, 2020.
In terms of product development, we will improve our grasp of market needs by raising the precision of our marketing technology while continuously working to optimize, and maximize the size of, the market and aiming for growth in sales of new machines.
Tsuburaya Productions, as the key to business growth of the Group, will use all of the Group’s collective strength to promote business expansion both inside and outside Japan. Tsuburaya Productions will focus on achieving three main points during the fiscal year ending March 31, 2020: raising the profitability of movies; promoting monetization and raising the brand value of IPs through measures such as active tie-ups with other companies; and accelerating global expansion, primarily in North America and China.
Digital Frontier will aim for further earnings expansion by continuing to conduct video production and accept orders for video development in Japan. It will also pursue this goal through work on high-quality video titles produced with its superior 3DCG technology and strategies such as the promotion of global expansion, primarily in China.
Our profit forecasts for the fiscal year ending March 31, 2020 have been disclosed in the table above. We have refrained from disclosing a forecast for net sales, as we expect the volatilities of net sales result from the flexible products mix*.
In accordance with the factors above, we forecast operating profit of ¥1,500 million (a YoY improvement of ¥2,863 million), ordinary profit of ¥1,500 million (a YoY improvement of ¥2,896 million), and profit attributable to owners of parent of ¥1,000 million (a YoY improvement of ¥1,298 million) in the fiscal year ending March 31, 2020.
*: The accounting method of our PS machine has two different ways of distribution sales and agency sales. There is a possibility that some machines have a large impact on net sales. Please refer to "Our Market" for details.
iii.) Basic policy for profit distribution, dividends for the fiscal year under review and the fiscal year ending March 31, 2020
The Company considers increasing corporate value to be a crucial management issue and follows a basic policy of paying appropriate dividends commensurate with profits realized. On the other hand, we consider that, due to the rapid changes of the market environment, stabilizing the financial capacity in medium- and long-term perspectives to give the priority to secure funds for investment toward expansion of profits will lead to the maximum return to shareholders which includes the future increase in corporate value.
In terms of specific figures, we have decided to propose a year-end dividend of ¥10 per share for the fiscal year ended March 31, 2019. This matter will be on the agenda at the 31st Annual General Meeting of Shareholders to be held on June 19, 2019. The dividends for the next fiscal year are to be ¥10 per share as well.
During the fiscal year under review, cash and cash equivalents (hereinafter, “cash”) increased by ¥4,434 million YoY, amounting to ¥28,807 million at the end of the year ended March 31, 2019.
Cash flow for the year ended March 31, 2019 and contributing factors are as follows: