To Our Shareholders
Financial results in fiscal 2018
First of all, I would like to take this opportunity to thank the Company's shareholders for their consistent support.
In order to achieve sustainable and solid growth in line with our long-term objectives and targets, we created the Seibu Group’s Medium-Term Management Plan—“Challenge Targets”— as a three-year road map spanning the period from fiscal 2018 to 2020. Under this plan, the Group has been continuing to carry out a broad range of measures, founded on the basic policies of pursuing all-new innovations at a rapid pace and establishing a platform for growth with a long-term perspective. Furthermore, we have been giving importance to creating new businesses while expanding the Group’s existing business operations.
In the Group’s Urban Transportation and Regional business, we commenced service of the Haijima Liner, a new 40000-series commuter train with a seat reservation system, in March 2018 in order to increase convenience and comfort for passengers. We also began renovation work on two train stations in the Greater Tokyo Area—Seibu Shinjuku Station and Hanno Station—designed to make the most of the characteristics of each location. In the Hotel and Leisure business, we decided to expand our Prince Vacation Club hotel membership service to Prince Hotels in the Karuizawa and Izu areas, which are both popular tourist destinations in Japan, and will begin accepting applications from July 2019. Meanwhile, in the Real Estate business, we proceeded with construction work and leasing of the newly named Daiyagate Ikebukuro (tentatively named Seibu Railway Ikebukuro Building) in preparation for its opening in the spring of 2019. Construction of new facilities in the area surrounding MetLife Dome, home to the Seibu Lions professional baseball team, is also underway with the goal of redeveloping the area as a baseball-themed park.
In addition, on November 1, 2018, the Seibu Group commenced its own childcare service for its employees in an effort to foster a corporate culture that values diversity and allows employees to maximize their potential.
By continually taking on the challenge of getting new business off the ground, we intend to offer even newer value and excitement in the future.
Turning to financial results in the six-month period ended September 30, 2018, operating revenue amounted to ¥283.2 billion, up 6.3% compared with the same period of the previous fiscal year. This increase was due to several factors, including increased revenue per available room (RevPAR) in the hotel business in Japan and Hawaii, as well as steady proceeds from conferences and events (what is called as MICE* events) held at the Group’s hotels. Rental revenue from Tokyo Garden Terrace Kioicho as well as attendance at Seibu Lions baseball games were also up year on year. As a result of the growth in operating revenue, operating profit rose 11.2% to ¥42.0 billion and profit attributable to owners of the parent company climbed 11.5% to ¥25.9 billion.
Payment of dividends
As a basic policy, we maintain stable payments of dividends while reinforcing our financial structure by ensuring ample internal reserves, and work to raise corporate value and enhance the operational foundations of the Group as a whole. Moreover, as part of the Seibu Group's long-term strategies, an important financial strategy is achieving an optimal balance between the return of profits to shareholders and investment in long-term growth. In consideration of the above, we decided to pay an annual dividend of ¥23 per share for fiscal 2018, comprising an interim and fiscal year-end dividend of ¥11.5 per share, respectively.
In addition, with a view to paying even higher dividends to shareholders in the future, the Company repurchased some of its own shares in November 2018, setting the maximum amount allocated to the repurchase at ¥10.0 billion.
We will continue carrying out reforms in an effort to maximize corporate and shareholder value. As we pursue these endeavors, we ask for the understanding and support of all of our shareholders.
SEIBU HOLDINGS INC.
Note: MICE is an acronym for Meetings (corporate conferences), Incentive (corporate training and incentive travel), Convention (by international organizations and academic groups) and Event/Exhibition (including exhibitions and trade shows). It refers to business events that entail a large convergence of people.