| Kamakura Shinsho, Ltd. (6184) |
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Company |
Kamakura Shinsho, Ltd. |
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Code No. |
6184 |
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Exchange |
TSE 1st Section |
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Chairman |
Hirotaka Shimizu |
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President |
Takahito Aiki |
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Address |
7F, Yaesu Center Bldg., 1-6-6, Yaesu, Chuo-ku, Tokyo |
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Year-end |
January |
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URL |
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* Stock price as of the close on March 9, 2018. The number of shares issued is obtained by deducting the number of treasury stocks from the number of shares issued at the end of the latest quarter.
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* The forecasted values were provided by the company. It undertook a 1:200 stock split in August 2015 and a 1:4 stock split in October 2016.
We will present the outline of Kamakura Shinsho's settlement of accounts for the fiscal year (FY) ended January 2018, forecasts and initiatives for FY ending January 2019 and 2020 in this Bridge Report. |
| Key Points |
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| Company Overview |
 Corporate Philosophy Under the idea that the exchange of "kindness" and "thankfulness" is the foundation for forming a rich society, Kamakura Shinsho wants to exist to increase the moment of feeling "thankfulness" in various stages of life in the society. Corporate History Business DescriptionWeb Services Business
The company disseminates information on services and products through portal websites covering the entire end-of-life fields including preparation for death, funeral, altar, grave, and inheritance. It also supports website users' decision making by responding to inquiries and providing consultation at the customer center. Meanwhile, the company provides sales support services and introduces prospective customers to business operators of funeral companies, stores of Buddhist altar and its fittings, tombstone stores, and temples and cemeteries that are on the company's websites. The website users receive services for free. The company receives a contract payment when the contract is settled between the prospective customer whom the company introduced and the business operator (about 10 to 20% of the contracted amount). It is a friendly system to the business operators, because it can be considered as "deferred advertisement expenditure."The competitors in the industry include, as for the funeral services, AEON LIFE Co., Ltd., a leading distribution company, and UNIQUEST ONLINE INC. which operates "Small Funeral" and "Funeral book.com." As for tombstone, there are Metropolitan stone cooperatives that operate "Moshimo.dot.net," Ohnoya of Memorial Art, and Nihon Butsuji Net. The scale of the market is 1.4 trillion yen for the funeral market and 163.9 billion yen for the market of Buddhist altar and its fittings. Key Performance Indicators = Compensation when a contract is settled: Introductions X closing rate X Unit price X Commission rate
To increase compensation, the company has been making efforts to increase the introductions and improve the closing rate, and as a result, it is hoping to lead the market share expansion to raise the commission rate. To increase the introductions, it is necessary to enhance contents, improve leads, improve designs, and use advertisements. To improve the closing rate, it is necessary to strengthen communication with the website users and strengthen collaboration with the business operators.
  Publications, Others Business
The company issues various publications related to memorial services such as funerals, graves and altars by monthly "Butsuji" (annual subscription fee: 16,200 yen including tax), which is a business information magazine for business operators in the memorial service industry. Name recognition, trustworthiness, industry network, and content creation power as a publisher are also utilized for Internet services. It is a business with synergies that cannot be measured by sales or profit.
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| Fiscal Year January 2018 Earnings Results |
 Sales increased 28.3% YoY and operating profit grew 23.7% YoY.
Sales increased 28.3% YoY to 1,709 million yen. The mainstay web services grew 33% YoY to lead the sales growth as a whole. All three business areas including graves (up 35%, YoY), funerals (up 32%, YoY) and Buddhist altars (up 20%, YoY) showed high growth. On the profit side, although operating expenses centered around personnel and recruitment expenses increased due to a larger number of recruitments than anticipated, they were offset by an increase in sales and an improvement in gross profit margin due to a decline in CPA etc. As a result, operating profit increased 23.7% YoY. Recurring profit increased only 11.1% YoY, due to the fact that 32 million yen of the public offering expenses associated with the market change to the First Section of the Tokyo Stock Exchange (TSE) was posted as non-operating expenses, but net income increased to 254 million yen, up 23.5% YoY, due to the decrease in tax burden. In comparison with the forecast at the beginning of the term, sales were at the same level as the forecast, but operating profit was slightly lower than the forecast due to rise in personnel and recruitment expenses associated with the advancement of recruitment. Recurring profit was also affected by the posting of public offering expenses associated with the change of the stock market. It is still in the process of increasing the number of employees, but because employment of leaders has already made a progress, it is shifting from recruitment using agencies to direct employment and employee-referral employment. Therefore, the recruitment expenses appear to have peaked out. The number of full-time employees at the end of the term was 75 (51 at the end of the previous fiscal year).
     Incidentally, there are aspects where the revenue increase was raised due to an addition of funeral companies associated with adjustment of counts. But even if this effect was excluded, there would be an increase of 40% in sales.    |
| Earnings Estimates and Activities for Fiscal Year January 2019 and 2020 |
 It is estimated that sales will grow 28.7% YoY and operating profit will increase 28.45% YoY in the FY ending January 2019.
While continuing to invest in growth, the company will increase sales and profits of the web services and strengthen other services including new business development.With respect to FY ending January 2019, all three businesses are expected to have high sales growth: The graves business is expected to increase 32%, the funerals business 39%, and the Buddhist altars business 15% YoY. For FY ending January 2020, the company aims for an operating profit of 700 million yen to exceed 650 million yen, which is the condition for exercising fee-based stock options issued in June 2017. The entire Company will work together for growth. The company disclosed business forecasts for FY ending January 2019 and 2020. According to President Aiki, "although we plan to launch various new businesses for growth, the forecasts are the minimum targets that can be achieved by continuous improvement and acceleration of the current businesses."     (3) Goals and future initiatives
Goals and path (1) Focus on maintaining customer convenience and eliminating anxiety and strengthening areas outside of service partner expertise in our three main businesses, realizing high growth and high market share
Strategies by business
In each business, the company will have the "clear ideal image," establish new measures, and strengthen the foundation of the three projects across the board. In the graves business for which the company is already leading the on-line industry, it will try to implement the "strategies to be overwhelming No. 1." During the current fiscal year, it will start a new type of "grave service" (details will be announced later) and launch advertisement using mass-media to get publicity about high quality services and the largest number of registered stores in Japan, while emphasizing cost effectiveness. For the funerals business, it will implement the "No.1 platform strategies." In addition to obtaining the top customer satisfaction (completed), it aims to obtain the highest number of reviews (completed) and the highest number of funeral halls (partnership). In order to attract more customers and increase customer conversions, renewal of the websites will also be carried out several times from March to June. In the Buddhist altars business, based on the fact that the business environment of the Buddhist altar stores has become increasingly severe and the awareness of advertising effectiveness is rising, the company promotes the "Only One Strategy" and aims for becoming the channel to be chosen by the Buddhist altar stores. For this reason, it will strengthen the products. Specifically, the company make the coupons, enrich an introduction of products, instead of just introducing Buddhist alter shops, and enable product comparisons. It will also make efforts to enhance the store visit rate and closing rate.
Business cross-cutting strategies
Along with the above-mentioned business-specific strategies, it will also implement cross-cutting measures to maximize productivity. It will place a person who supervises three businesses, and, while maintaining the independence of each business, it will instrument KPI management, numerical management for each client, horizontal development of success cases, regional strengthening, strengthening of SEO and marketing measures, and consolidation of the customer center function across three businesses.
Strengthening the business foundation
In addition to strengthening development capabilities and technology to respond to increased access and improving convenience, it will also make efforts to improve brand value and strengthen customer (users of the company's services) capabilities. To improve the brand value, it will continue to work on strengthening media relations and publicity, which the company has been worked on from the previous fiscal year. It will also launch mass-media advertisement while emphasizing cost-effectiveness. To strengthen customer capabilities, it will build a member base and enhance the function of the call center, which is a point of contact with customers. It will also strengthen analytical capabilities of markets and customers by specialized teams.
(2) Thoroughly strengthen our ability to know and understand customers and resolve issues
The points are: (1) Establish superior advantages other companies cannot imitate with story business (Farewell party business), (2) Increase direct contact (voice, face, heart) with customers, (3) Create knowledge and data platform based on customer information, and (4) Cultivate and attract end-of-life market professionals.In FY ending January 2019, for (1), the company will work on increasing the tailored farewell parties which can be done from a membership fee of 5,000 yen. This effort began in FY ended January 2017 (Sales were 8 million yen in FY January 2017 → 50 million yen in FY January 2018) . Farewell parties are common among celebrities, etc., but the company will expand the business to include a wider range of public, offering affordable membership fees while maintaining quality. For (2), in order to grasp the true demands of the service users, the company summarized the call center functions of the three businesses and established the CS division. It will make efforts to lead this initiative to a successful result. For (3), it will construct and introduce data (service user information) analysis base to realize prompt decision making and marketing activities. For (4), in order to deepen the understanding of the market, it will strengthen in-house research efforts including evolution of the monthly "Butsuji" which is a business information magazine for business operators of the memorial service industry and release it. It will also work on the implementation of roundtable talks. (3) Cultivate and engage in business to create an ecosystem for providing seniors and their families with the highest level of service
Currently, the company provides memorial service-related services. Through these services, it will capture bereaved families, etc. and develop demand for active senior services, services for people who need essential support or care, and services for people who need nursing care. In addition, it will organize the users of these services as members under a community platform. The company is intending to expand the businesses by implementing investment and M&A. Their businesses can make use of the strengths of the Internet, and quick recovery of investment can be anticipated. Furthermore, because it is difficult to approach seniors only through the Internet, it may also consider person-to-person approaches. However, it will not target businesses that require large-scale investments in assets, stocks, personnel etc. It will strengthen customer contacts by nurturing businesses that require only a small amount of upfront investment and bring profit at an early stage and create an ecosystem for seniors and their families. As part of this effort, it already launched a pet sitting business and a computer schools business.
Pet Sitting Business
The company made a minority investment in Care Pets Co., Ltd., which operates a franchise business for pet sitter services including the pets in need of care and nursing. About half of the users are 65 years old and over, and about half of the users use the service more than 30 times a month. Kamakura Shinsho will establish a 100% subsidiary and will provide services as franchisees in Setagaya-ku, Suginami-ku and Nerima-ku in Tokyo.
Computer Schools Business
It will establish a joint venture with Japan Itskill Co., Ltd. and operate computer training classes, "Minna no Pasokon Kurabu." Its purposes are to enhance computer skills of the participants but to form communities using computers. The company is planning to use empty spaces of the specific post office buildings and shopping malls for the classes.
(4) Become a respected company by tackling challenges faced by society
The company aims to become an excellent company that has growth potential/profitability and social contribution/social nature by implementing awareness activities of seniors and their families through the end-of-life seminars, publishing "Social Contribution Organization Guidebook" (comparative information of social contribution organizations), and strengthening cooperation with "Tsunagu Inochi Foundation." Furthermore, to achieve the goal, it will implement activities such as self-realization of seniors and work on social issues related to deceased people leaving no one to attend to their graves, lonely death, seniors in poverty, seniors providing nursing care of seniors, leaving jobs to provide nursing care to a family member, euthanasia and dignity death.
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| Conclusions |
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| <Reference: Regarding corporate governance> |
 ◎ Corporate Governance Report
Updated on Jul. 21, 2017
Basic approaches
The company recognizes that establishing corporate governance is indispensable to improve corporate value, maximize shareholder profits, and build good relationships with stakeholders. Specifically, it believes that it is important for the President and directors who have been entrusted with management of the company to discipline themselves, make appropriate management decisions based on their responsibilities, pursue profits through its businesses, secure soundness and improve its reliability, actively disclose information to fulfill accountability, and build an effective internal control system.
<Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts)>
Supplementary principle 4-1-2<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>
Principle 1-4Principle 5-1Disclaimer
This report is intended solely for informational purposes, and is not intended as a solicitation to invest in the shares of this company. The information and opinions contained within this report are based on data made publicly available by the company, and comes from sources that we judge to be reliable. However, we cannot guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness or validity of said information and or opinions, nor do we bear any responsibility for the same. All rights pertaining to this report belong to Investment Bridge Co., Ltd., which may change the contents thereof at any time without prior notice. All investment decisions are the responsibility of the individual and should be made only after proper consideration.Copyright (C) 2018 Investment Bridge Co., Ltd. All Rights Reserved. |
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