The impact on new enrollments caused by the seventh and eighth waves of COVID-19 together with rising utility costs had some negative effects on business performance. However, we believe it was a year in which we were able to lay the groundwork for future growth, entering into a capital and business alliance with Advantage Advisors, capital participation in Tokyu Sports Oasis, among other measures.

What is the background and purpose of the capital and business alliance with Advantage Advisors announced in FY2022?

The COVID-19 pandemic will come to an end at some point. I thought it was necessary to be well prepared in various fields including the financial aspect when that happened in order to promptly shift the company toward a growth strategy.
The pandemic also forced us to think again about the way our existing sports clubs worked. Extending from the past is no longer standing.
The proposal we received from Advantage Advisors under such circumstances included financing and utilization of external knowledge. Having learned about their views on our company and investment policies, we decided to enter into a capital and business alliance with them, considering it effective in creating new value for our company.

In August 2023, you announced your acquisition of 100% of Tokyu Sports Oasis shares. What was the background and purpose of this decision?

We position M&A as an important strategy, and have expanded our business through 18 M&A transactions, both large and small. In the fitness business, human resources are important, and we strive to carry out M&A in a friendly manner through sincere dialogue in order to bring out each other’s strengths.
Since our capital participation with Tokyu　Sports Oasis, we have had numerous discussions regarding future business growth. Although COVID-19 has been downgraded to a Class 5 disease and there are signs of recovery, in the face of continued uncertainty including rising energy costs, we decided that acquisition of 100% of Tokyu Sports Oasis shares on March 31, 2024, would be in the best interest of both parties.
Together, RENAISSANCE and Tokyu Sports Oasis will have about 140 directly-managed sports clubs, making us the largest corporate group in the fitness industry in terms of sales. Although revenues of individual clubs are important in the fitness business, we can also expect economies of scale as business expands.

What are the key points regarding the outlook for FY2023?

This will be a fiscal year when expenses will come first, with the opening of four new sports club facilities, increasing utility costs and wage hikes of 5% among other factors. However, from FY2024 onward, we hope the situation will improve significantly as we expect the new facilities and the full acquisition of Tokyu Sports Oasis shares to contribute to profits.

What targets have you set in terms of financial indicators and what is the current status?

We believe it is important to strike a balance between improving financial vulnerabilities resulting from the COVID-19 pandemic and investing for growth. Together with the acquisition of Tokyu Sports Oasis shares, our policy of focusing on cash flow and restoring a sound financial position over time has not changed.

How do you intend to make use of future surplus and what are the policies regarding shareholder returns?

Same as before, we have always considered return of profits to shareholders as one of our most important management measures. Our basic policy is to continuously return profits to shareholders in accordance with business performance, while securing internal reserves necessary for stable future corporate growth and coping with changes in the business environment. We always consider it crucial to balance between shareholder returns and improving internal reserves.

Lastly, please give a message to our readers.

Although the business environment in the fitness industry continues to undergo significant changes, many people are realizing the importance of good health and maintaining relationships with others. Going forward, we will work to create value at Renaissance & Oasis and strive for further growth to meet the expectations of our shareholders and investors. We would like to ask our shareholders and investors for their continued understanding and support.