Full Year 2026 LogProstyle Inc Earnings Call
Speaker #1: Beyond, and thank you for joining us. I'm Yasuyuki Nozawa, founder and CEO of LogPro Style. Today we'll review our fiscal year 2026 full-year results, our second year as an NYSE American Listed Company, and explain why we believe our model is still only beginning to be understood by the market.
Yasuyuki Nozawa: Good morning, everyone, and thank you for joining us. I'm Yasuyuki Nozawa, founder and CEO of LogProstyle. Today, we'll review our fiscal year 2026 full year results, our second year as an NYSE American-listed company, and explain why we believe our model is still only beginning to be understood by the market. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding LogProstyle Inc.'s future financial performance, operating results, business strategy, capital resources, liquidity, development pipeline, operational efficiency, and long-term growth objectives. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements.
Yasuyuki Nozawa: Good morning, everyone, and thank you for joining us. I'm Yasuyuki Nozawa, founder and CEO of LogProstyle. Today, we'll review our fiscal year 2026 full year results, our second year as an NYSE American-listed company, and explain why we believe our model is still only beginning to be understood by the market. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding LogProstyle Inc.'s future financial performance, operating results, business strategy, capital resources, liquidity, development pipeline, operational efficiency, and long-term growth objectives. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements.
Speaker #1: This presentation contains forward-looking statements within the meaning of the private securities litigation reform act of 1995. Forward-looking statements include but are not limited to statements regarding LogPro Style Inc.'s future financial performance, operating results, business strategy, capital resources, liquidity, development pipeline, operational efficiency, and long-term growth objectives.
Speaker #1: These statements are based on current expectations and assumptions, and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements.
Speaker #1: These risks and uncertainties include, but are not limited to, changes in economic conditions, real estate and hospitality market conditions, interest rate fluctuations, construction and development risks, cost inflation, regulatory changes, foreign exchange fluctuations, and other risks related to the company's business operations and other factors described in the company's filings with the U.S.
Yasuyuki Nozawa: These risks and uncertainties include, but are not limited to, changes in economic conditions, real estate and hospitality market conditions, interest rate fluctuations, construction and development risks, cost inflation, regulatory changes, foreign exchange fluctuations, and other risks related to the company's business operations and other factors described in the company's filings with the US Securities and Exchange Commission, including the risks detailed in the company's annual report on Form 20-F for the fiscal year ended 31 March 2026, as filed with the US Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this press release, except as required by applicable law.
Yasuyuki Nozawa: These risks and uncertainties include, but are not limited to, changes in economic conditions, real estate and hospitality market conditions, interest rate fluctuations, construction and development risks, cost inflation, regulatory changes, foreign exchange fluctuations, and other risks related to the company's business operations and other factors described in the company's filings with the US Securities and Exchange Commission, including the risks detailed in the company's annual report on Form 20-F for the fiscal year ended 31 March 2026, as filed with the US Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this press release, except as required by applicable law.
Speaker #1: Securities and Exchange Commission, including a risk detailed in the company's annual report on Form 20F for the fiscal year ended March 31, 2026, as followed with the U.S.
Speaker #1: Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statements reflect events or circumstances after the date of the press release, except as required by applicable law.
Speaker #1: Any references herein to a website have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this presentation.
Yasuyuki Nozawa: Any references herein to a website have been provided as a convenience, and the information contained on such website is not incorporated by reference into this presentation. Before numbers, a word on alignment. I founded LogProstyle in 2006 and have led it ever since, and I remain its largest shareholder with roughly 69% of the company. My interests are your interests. We're governed by a 6-member board, 2 of them independent, supported by an experienced management team. Here is the full year on a single page. Revenue of JPY 22.2 billion, up 7.6%. Gross margin of 19.8%, our strongest in 3 years, and adjusted EBITDA of JPY 1.64 billion, up 10.6%. This was our 4th consecutive year of revenue growth, with earnings growing faster than the top line. Real estate is 93% of revenues, with hotels and our other activities making up the balance. Our conviction is straightforward.
Yasuyuki Nozawa: Any references herein to a website have been provided as a convenience, and the information contained on such website is not incorporated by reference into this presentation. Before numbers, a word on alignment. I founded LogProstyle in 2006 and have led it ever since, and I remain its largest shareholder with roughly 69% of the company. My interests are your interests. We're governed by a 6-member board, 2 of them independent, supported by an experienced management team. Here is the full year on a single page. Revenue of JPY 22.2 billion, up 7.6%. Gross margin of 19.8%, our strongest in 3 years, and adjusted EBITDA of JPY 1.64 billion, up 10.6%. This was our 4th consecutive year of revenue growth, with earnings growing faster than the top line. Real estate is 93% of revenues, with hotels and our other activities making up the balance. Our conviction is straightforward.
Speaker #1: Before numbers, a word on alignment. I founded LogPro Style in 2006 and have led it ever since, and I remain its largest shareholder with roughly 69% of the company.
Speaker #1: My interests are your interests. We're governed by a six-member board, two of them independent, supported by an experienced management team. Here is the full year on a single page.
Speaker #1: Revenue of 22.2 billion yen, up 7.6%. Gross margin of 19.8%, our strongest in 3 years, and adjusted EBITDA of 1.64 billion yen, up 10.6%.
Speaker #1: This was our fourth consecutive year revenue growth, with earnings growing faster than the top line. Real estate is 93% of revenues, with hotels and our other activities making up the balance.
Speaker #1: Our conviction is straightforward: greater Tokyo residential is most resilient market in Japan, and the renovation opportunity remains largely untapped. The story rests on four pillars: a model we've proven over 20 years, Tokyo as a structural advantage, a dedicated tenant negotiation team that unlocks properties at a discount, and a hotel business that adds recurring income.
Yasuyuki Nozawa: Greater Tokyo residential is the most resilient market in Japan, and the renovation opportunity remains largely untapped. The story rests on 4 pillars, a model we've proven over 20 years. Tokyo has a structural advantage, a dedicated tenant negotiation team that unlocks properties at a discount, and a hotel business that adds recurring income. At the core is capital recycling. We acquire pre-owned condominiums or land at disciplined prices, renovate or develop over a 1-to-2-year cycle, sell, and reinvest. Because our cycles are short, every completed project replenishes the equity for the next, letting us grow without continuously raising outside capital. LogSuite is our renovation platform sold under the LogMansion brand. These are full-gut renovations with signature walnut and oak interiors from our own wood manufacturing, not cosmetic refurbishments. Our average unit was JPY 188 million this year, and we sold 41 units.
Yasuyuki Nozawa: Greater Tokyo residential is the most resilient market in Japan, and the renovation opportunity remains largely untapped. The story rests on 4 pillars, a model we've proven over 20 years. Tokyo has a structural advantage, a dedicated tenant negotiation team that unlocks properties at a discount, and a hotel business that adds recurring income. At the core is capital recycling. We acquire pre-owned condominiums or land at disciplined prices, renovate or develop over a 1-to-2-year cycle, sell, and reinvest. Because our cycles are short, every completed project replenishes the equity for the next, letting us grow without continuously raising outside capital. LogSuite is our renovation platform sold under the LogMansion brand. These are full-gut renovations with signature walnut and oak interiors from our own wood manufacturing, not cosmetic refurbishments. Our average unit was JPY 188 million this year, and we sold 41 units.
Speaker #1: At the core is capital recycling. We acquire pre-owned condominiums or land at disciplined prices, renovate or develop over a 1 to 2-year cycle, sell and reinvest.
Speaker #1: Because our cycles are short, every completed project replenishes the equity for the next, letting us grow without continuously raising outside capital. Lock Suite is our renovation platform sold under the Log Mansion brand.
Speaker #1: These are full-gut renovations with signature walnut and oak interiors from our own wood manufacturing. Not cosmetic refurbishments. Our average unit was $188 million yen this year, and we sold 41 units.
Speaker #1: Pro Style is our development platform in two formats: premium condominiums for owner-occupiers and compact rental buildings sold whole to institutional investors. We extend this through Pro Style Ryokan, where we develop a hotel asset, sell it, and lease it back to operate, capturing development profit and recurring hotel income in a single lifecycle, a model that differentiates LogPro Style.
Yasuyuki Nozawa: Prostyle is our development platform in two formats, premium condominiums for owner-occupiers, and compact rental buildings sold whole to institutional investors. We extend this through Prostyle Ryokan, where we develop a hotel asset, sell it, and lease it back to operate, capturing development profit and recurring hotel income in a single life cycle, a model that differentiates LogProstyle. Regarding our hotel business, we operate four ryokan-style properties today, with a fifth in Asakusa opening in 2028 on land we already secured. Hotel revenue grew nearly 5% this year, and through our Chino property management business, we now manage more than 3,400 units, over 70% for third parties, the early foundation of a recurring income platform. I want to be precise here. We are not a Japan housing play. We are a Greater Tokyo premium residential specialist.
Yasuyuki Nozawa: Prostyle is our development platform in two formats, premium condominiums for owner-occupiers, and compact rental buildings sold whole to institutional investors. We extend this through Prostyle Ryokan, where we develop a hotel asset, sell it, and lease it back to operate, capturing development profit and recurring hotel income in a single life cycle, a model that differentiates LogProstyle. Regarding our hotel business, we operate four ryokan-style properties today, with a fifth in Asakusa opening in 2028 on land we already secured. Hotel revenue grew nearly 5% this year, and through our Chino property management business, we now manage more than 3,400 units, over 70% for third parties, the early foundation of a recurring income platform. I want to be precise here. We are not a Japan housing play. We are a Greater Tokyo premium residential specialist.
Speaker #1: Regarding our hotel business, we operate 4 ryokan-style properties today, with a fifth in Asakusa opening in 2028 on land we already secured. Hotel revenue grew nearly 5% this year, and through our Chino property management business, we now manage more than 3,400 units, over 70% for third parties.
Speaker #1: The early foundation of a recurring income platform. I want to be precise here. We are not a Japan housing play. We are a greater Tokyo premium residential specialist.
Speaker #1: Tokyo benefits from continued immigration, constrained land supply, and deep liquidity, even as Japan's overall population declines. And the inbound tourism recovery, with Tokyo area hotel room rates up about 70% industry-wide, supports our hotel business where our own average daily rate grew nearly 16% this year.
Yasuyuki Nozawa: Tokyo benefits from continued immigration, constrained land supply, and deep liquidity, even as Japan's overall population declines. The inbound tourism recovery, with Tokyo area hotel room rates up about 70% industry-wide, supports our hotel business, where our own average daily rate grew nearly 16% this year. Now let me walk you through the. This section covers our full-year results, the balance sheet, and how we think about capital efficiency. Revenue was JPY 22.2 billion, up 7.6% year-on-year. Gross margin expanded 260 basis points to 19.8%, and net income was essentially flat, up 0.8%. Adjusted EBITDA grew about 10.6% to JPY 1.64 billion. I'll explain the moving parts on the next slides. Within real estate, we operate three distinct engines. LogSuite renovation is roughly 45% of real estate revenue on a one-year cycle. Prostyle development is about 40% on a 1.5 to 2-year cycle.
Yasuyuki Nozawa: Tokyo benefits from continued immigration, constrained land supply, and deep liquidity, even as Japan's overall population declines. The inbound tourism recovery, with Tokyo area hotel room rates up about 70% industry-wide, supports our hotel business, where our own average daily rate grew nearly 16% this year. Now let me walk you through the. This section covers our full-year results, the balance sheet, and how we think about capital efficiency. Revenue was JPY 22.2 billion, up 7.6% year-on-year. Gross margin expanded 260 basis points to 19.8%, and net income was essentially flat, up 0.8%. Adjusted EBITDA grew about 10.6% to JPY 1.64 billion. I'll explain the moving parts on the next slides. Within real estate, we operate three distinct engines. LogSuite renovation is roughly 45% of real estate revenue on a one-year cycle. Prostyle development is about 40% on a 1.5 to 2-year cycle.
Speaker #1: Now let me walk you through. This section covers our full-year results, the balance sheet, and how we think about capital efficiency. Revenue was 22.2 billion yen, up 7.6% year on year.
Speaker #1: Gross margin expanded 260 basis points to 19.8%, and net income was a sensory flat, up 0.8%. Adjusted EBITDA grew about 10.6% to 1.64 billion yen, and I'll explain the moving parts on the next slides.
Speaker #1: Within real estate, we operate three distinct engines: Log Suite, renovation is roughly 45% of real estate revenue on a 1-year cycle; Pro Style, development is about 40% on a 1.5 to 2-year cycle; and Log Asset, landowner direct sourcing advisory, is about 15% in a fragmented market with very little large-cap competition.
Yasuyuki Nozawa: LogAsset landowner direct sourcing advisory is about 15%, in a fragmented market with very little large cap competition. A little more detail on the drivers. We completed 261 units, up from 187, with a clear shift toward bulk institutional sales. Our 19.8% growth margin sat at the top of our historical range, reflecting underwriting discipline. Operating income grew 17.1%, faster than revenue, confirming operating leverage. On EPS, it declined 7.5% despite flat net income, purely because our share count rose about 9% after the IPO, alongside a higher tax charge. That is dilution and timing, not an earnings problem. Stepping back, this is the 4-year picture. Revenue has grown from JPY 13.3 billion to JPY 22.2 billion.
Yasuyuki Nozawa: LogAsset landowner direct sourcing advisory is about 15%, in a fragmented market with very little large cap competition. A little more detail on the drivers. We completed 261 units, up from 187, with a clear shift toward bulk institutional sales. Our 19.8% growth margin sat at the top of our historical range, reflecting underwriting discipline. Operating income grew 17.1%, faster than revenue, confirming operating leverage. On EPS, it declined 7.5% despite flat net income, purely because our share count rose about 9% after the IPO, alongside a higher tax charge. That is dilution and timing, not an earnings problem. Stepping back, this is the 4-year picture. Revenue has grown from JPY 13.3 billion to JPY 22.2 billion.
Speaker #1: A little more detail on the drivers. We completed 261 units, up from 187, with a clear shift toward bulk institutional sales. Our 19.8% gross margin sat at top of our historical range, reflecting underwriting discipline.
Speaker #1: And operating income grew 17.1%, faster than revenue confirming operating leverage. On EPS, it declined 7.5% despite flat net income, purely because our share count rose about 9% after the IPO, alongside a higher tax charge.
Speaker #1: That is dilution and timing, not an earnings problem. Stepping back, this is the 4-year picture. Revenue has grown from 13.3 billion yen to 22.2 billion yen.
Speaker #1: Just as important, adjusted EBITDA has grown from 998 million to 1.64 billion yen, up roughly 65% over the period, while our adjusted EBITDA margin has remained stable in a tight band around 7.2% to 7.5% in every one of those years.
Yasuyuki Nozawa: Just as important, adjusted EBITDA has grown from JPY 998 million to JPY 1.64 billion, up roughly 65% over the period, while our adjusted EBITDA margin has remained stable in a tight band around 7.2% to 7.5% in every one of those years. This has been profitable growth, not just top-line growth. Disciplined, consistent, and self-funding. On the balance sheet, total assets of JPY 27 billion, shareholder's equity of JPY 4.2 billion. That's about $26 million US, and an equity ratio of 15.6%. The essential point is that our inventory is real estate that collateralizes our borrowing. Our gross debt-to-equity of 4.1x the deliberate asset-backed leverage, structurally comparable to our property company's loan-to-value, not a sign of distress. To build on that, Japanese banks lend against the tangible asset, the land, and the condominiums, while we fund renovation and construction with our own equity.
Yasuyuki Nozawa: Just as important, adjusted EBITDA has grown from JPY 998 million to JPY 1.64 billion, up roughly 65% over the period, while our adjusted EBITDA margin has remained stable in a tight band around 7.2% to 7.5% in every one of those years. This has been profitable growth, not just top-line growth. Disciplined, consistent, and self-funding. On the balance sheet, total assets of JPY 27 billion, shareholder's equity of JPY 4.2 billion. That's about $26 million US, and an equity ratio of 15.6%. The essential point is that our inventory is real estate that collateralizes our borrowing. Our gross debt-to-equity of 4.1x the deliberate asset-backed leverage, structurally comparable to our property company's loan-to-value, not a sign of distress. To build on that, Japanese banks lend against the tangible asset, the land, and the condominiums, while we fund renovation and construction with our own equity.
Speaker #1: So this has been profitable growth, not just top-line growth. Disciplined, consistent, and self-funding. On the balance sheet, total assets of 27 billion yen, shareholders' equity of 4.2 billion yen, that's about 26 million US dollars, and an equity ratio of 15.6%.
Speaker #1: The essential point is that our inventory is real estate that collateralizes our borrowing. Our gross-to-debt-to-equity of 4.1 times the deliberate asset-backed leverage, structurally comparable to our property company's loan-to-value, not a sign of distrust.
Speaker #1: To build on that, Japanese banks lend against the tangible asset, the land, and the condominiums, while we fund renovation and construction with our own equity.
Speaker #1: So we believe that headline 4.1 times leverage overstates the real economic risk. In practice, our growth is disciplined by equity availability, not by expanding the balance sheet.
Yasuyuki Nozawa: We believe that headline 4.1x leverage overstates the real economic risk. In practice, our growth is disciplined by equity availability, not by expanding the balance sheet. On rates and inflation, our short cycles mean capital is repriced faster than the traditional developers. We are structurally less exposed to sustained rate increases. Japanese rates remain low. Our weighted average borrowing cost is below 3%, and inflation actually works in our favor. It makes renovated resale units more attractive relative to costlier new builds. Looking forward, several developments are worth watching. Sustained earnings growth, which builds a track record that directly challenges perceptions of earnings volatility, scaling of the hotel platform, broader understanding of our model, our gradual strengthening balance sheet, dividend growth.
Yasuyuki Nozawa: We believe that headline 4.1x leverage overstates the real economic risk. In practice, our growth is disciplined by equity availability, not by expanding the balance sheet. On rates and inflation, our short cycles mean capital is repriced faster than the traditional developers. We are structurally less exposed to sustained rate increases. Japanese rates remain low. Our weighted average borrowing cost is below 3%, and inflation actually works in our favor. It makes renovated resale units more attractive relative to costlier new builds. Looking forward, several developments are worth watching. Sustained earnings growth, which builds a track record that directly challenges perceptions of earnings volatility, scaling of the hotel platform, broader understanding of our model, our gradual strengthening balance sheet, dividend growth.
Speaker #1: On rates and inflation, our short cycles mean capital is repriced faster than in a traditional developers, so we are structurally less exposed to sustained rate increases.
Speaker #1: Japanese rates remain low, our weighted average borrowing cost is below 3%, and inflation actually works in our favor. It makes renovated resale units more attractive relative to costlier new builds.
Speaker #1: Looking forward, several developments are worth watching: sustained earnings growth, which builds a track record that directly challenges perceptions of earnings volatility, scaling of the hotel platform, broader understanding of our model, a gradual strengthening balance sheet, dividend growth.
Speaker #1: This is our second consecutive year distributions with the fiscal year 2026 dividend to be paid in full, equal, quarterly installments through April 2027, an increase in institutional discovery.
Yasuyuki Nozawa: This is our second consecutive year of distributions with the fiscal year 2026 dividend to be paid in four equal quarterly installments through April 2027, and increasing institutional discovery. We address the key risks on this page. Leverage, Tokyo concentration, cycle sensitivity, interest rates, and small cap liquidity. They are real but typical of our sector, and we believe they are well mitigated by our short cycles and asset-backed model. To bring it together, we have built a disciplined, founder-led platform that compounds capital through every cycle. The model is proven, and we look forward to building on it over the year ahead. Thank you all for joining us today.
Yasuyuki Nozawa: This is our second consecutive year of distributions with the fiscal year 2026 dividend to be paid in four equal quarterly installments through April 2027, and increasing institutional discovery. We address the key risks on this page. Leverage, Tokyo concentration, cycle sensitivity, interest rates, and small cap liquidity. They are real but typical of our sector, and we believe they are well mitigated by our short cycles and asset-backed model. To bring it together, we have built a disciplined, founder-led platform that compounds capital through every cycle. The model is proven, and we look forward to building on it over the year ahead. Thank you all for joining us today.
Speaker #1: We address the key risk on this page: leverage, Tokyo concentration, cycle sensitivity, interest rates, and small-cap liquidity. They are real, but typical of our sector, and we believe they are well mitigated by our short cycles and asset-backed model.
Speaker #1: To bring it together, we have built a disciplined founder-led platform that compounds capital through every cycle. The model is proven, and we look forward to building on it over the year ahead.
