Archived IR presentation for the Second Quarter of the Fiscal Year Ending September 30, 2024

Archived IR presentation for the Second Quarter of the Fiscal Year Ending September 30, 2024

M&A Capital Partners Inc. posted an archive video of the IR presentation (for the Second Quarter of the Fiscal Year Ending September 30, 2024) held on May 10th 2024 as follows.

  • ■ Click here for details on Q&A (all questions and answers)

  • I understand that the conclusion of large-scale deals was delayed beyond the period under review, but around what percentage of the full-year plan have you achieved so far?
    The significant decrease in sales compared to the previous period was not due to delays but rather to the lack of significant factors, such as last year’s large-scale deals, driving up results. On the other hand, contract liabilities, which can also serve as leading indicators for sales, have reached their highest level ever, and we expect a strong performance in the second half of the year.
    I think it is necessary to strike a good balance between closing and matching for the company’s plan for this fiscal year and increasing the number of active deals for growth in the next fiscal year, but is there anything you are focusing on to improve productivity and progress management?
    We are constantly improving our internal systems to increase the number of active deals. We are working to visualize the number of actions taken and set new numerical targets for KPIs to ensure thorough development activities for the next fiscal year.
    Could you provide some specific examples of how KPIs are set?
    We aim to easily grasp the extent to which activities corresponding to deal progress are being achieved on a daily, weekly, and monthly basis, allowing us to promptly identify points for improvement.
    Could you clarify some points on the outlook for the second half of the year? Although contract liabilities are at a historically high level, if we assume that they typically represent 10% of the contingency fees from potential deals closed, don’t you think that achieving the guidance might seem somewhat uncertain? Of course, I understand that these rates are not always exactly 10%.Also, what is the reason for the decrease in unit price to the ¥70 million range?
    Some deals do not fall within the 10% range. The impact on unit price this time is due to a lower proportion of large-scale deals and their smaller unit prices. We are currently accumulating basic agreements for the closing of deals in this fiscal year as we move toward July. Large-scale deals account for 24.3% of active deals, and we expect an improvement in unit prices going forward.
    We have heard that there is a trend in the industry from exclusive to non-exclusive contracts. In this context, companies that do not require deposits or have quick administrative procedures seem to have an advantage. What is the proportion of non-exclusive contracts in your Company, and how is the win rate amid the increasing number of non-exclusive contracts?
    Since we do not have data specifically collected on this. However, based on our perceptions, the number of players in the industry has increased, and non-exclusive contracts have also increased. While it is difficult to provide a numerical answer as we have not aggregated win rates, I believe that we have a low number of deals lost.
    Regarding the use of funds, there was a diagram showing the Company’s expansion into new peripheral areas. How long is the timeline for proceeding with this plan?
    We are constantly considering and exploring opportunities, although there are no large-scale plans in the immediate future. We are always on the lookout for chances to expand into new areas.
    In terms of the outlook for the industry, what has changed from what you expected two to three years ago?
    The most unexpected aspect was the increase in the number of players in the industry, which was supported by the government. Another change is that banks and securities companies have begun to engage in M&A activities with small and medium-sized enterprises. We had anticipated low-quality players to emerge earlier, but the number has increased. The efforts of the M&A Intermediaries Association will be a key factor. The association may also consider implementing qualification systems.
    If there were to be changes in fees, under what circumstances and how would they potentially change?
    We believe that transparency in fees is crucial. Instead of focusing on how fees are charged, it is important to disclose the fees for both sellers and buyers.
    Could it be that smaller companies are engaging in the business irresponsibly due to a decline in quality resulting from larger companies not being conservative enough in the past? Do you feel that there has been a change in larger companies since the early stages of the industry?
    Major long-established companies approach their work seriously with financial awareness, while some new companies are engaging in activities without a strong awareness of conflicts of interest. Our impression is that the major long-established companies are more dedicated and serious in their approach.

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M&A Capital Partners Co., Ltd.

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Corporate Profile
M&A Capital Partners provides M&A brokerage services for small and medium-sized companies.
Ever since the founding of the Company, our concept of “Fair M&A” has been that of a “client-first M&A” that prioritizes the interests of the customer.
Company name M&A Capital Partners Co., Ltd.
Established October 2005
Representative President
Satoru Nakamura
Head Office 36F Yaesu Central Tower, Tokyo Midtown Yaesu 2-2-1 Yaesu, Chuo-ku, Tokyo 104-0028,Japan
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