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S-Pool first quarter revenue down 6.6% as HR solutions segment reports decrease

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S-Pool reports 6.6% YoY decline in Q1 revenue

Tokyo-based staffing provider, S-Pool Inc. (2471:TYO), announced its revenue for the first quarter of its fiscal year ended 28 February, reporting a year-over-year decline of 6.6% to JPY 6.08 billion (USD 45.8 million). The company attributed the decrease in revenue and profits to a drop in demand in the Human Resources Solution segment, specifically a decrease in spot transactions for call centre services. However, S-Pool noted that its first quarter results were in line with expectations and anticipates significant growth from the second quarter onwards.

In Q1 2023, the company’s net sales were JPY 6.09 billion (USD 45.8 million), down 6.6% YoY, while gross profit decreased by 8.6% YoY to JPY 1.85 billion (USD 13.9 million). Operating profit decreased by 32.5% YoY to JPY 452 million (USD 3.4 million), and net profit decreased by 35.4% YoY to JPY 288 million (USD 2.1 million). The Business Solutions segment saw an increase in revenue by 25.3% YoY to JPY 2.5 billion (USD 18.8 million), while the Human Resource Solutions segment saw a decline in revenue by 20.5% YoY to JPY 3.6 billion (USD 27.2 million).

Earlier this year, S-Pool faced criticism from media reports regarding its farming operations run by its S-Pool Plus division, which provides employment opportunities for people with disabilities. S-Pool responded by stating that the media reports presented a one-sided view opposing its services.

Looking ahead, S-Pool forecasts revenue of JPY 28.28 billion for the full year 2023, with limited growth in net sales due to the decline in the Human Resource Solutions Segment. However, the company projects that operating profit will continue to increase due to growth in the Business Solutions Segment.

As of the end of trading on the day of the announcement, S-Pool shares closed at JPY 601.00 (USD 4.52), down 1.15% for the day and 9.07% above its 52-week low of JPY 551.00 (USD 4.15) set on 16 March 2023. The company has a market cap of JPY 48.04 billion (USD 361.42 million).