Interim report
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Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( Under Japanese GAAP ) August 7 , 2026 Company name : Starts Corporation Inc. Listing : Tokyo Stock Exchange Securities code : 8850 URL : https://www.starts.co.jp/ Representative : Toyotaka Muraishi , President Inquiries : Telephone : + 81-3-6202-0111 Hisayuki Muramatsu , Director Scheduled date to commence dividend payments : Preparation of supplementary material on quarterly financial results : None Holding of quarterly financial results briefing : None ( Yen amounts are rounded down to millions , unless otherwise noted . ) 1. Consolidated financial results for the three months ended June 30 , 2026 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes . ) Profit attributable to Net sales Operating profit Ordinary profit owners of parent Three months ended Millions of yen % June 30 , 2026 62,214 4.7 June 30 , 2025 59,415 9.9 Millions of yen 7,995 8,345 % Millions of yen % Millions of yen % ( 4.2 ) 15.3 8,465 3.3 5,556 8.4 8,192 ( 2.9 ) 5,126 ( 35.2 ) Note : Comprehensive income For the three months ended June 30 , 2026 : For the three months ended June 30 , 2025 : ¥ 5,572 million ¥ 4,755 million [ 17.2 % ] [ ( 37.8 ) % ] Basic earnings per share Diluted earnings per share Three months ended Yen Yen June 30 , 2026 June 30 , 2025 117.33 106.42 ( 2 ) Consolidated financial position Total assets Net assets Equity - to - asset ratio As of June 30 , 2026 Millions of yen Millions of yen % March 31 , 2026 351,821 352,746 196,015 192,571 54.2 53.5 Reference : Equity As of June 30 , 2026 : As of March 31 , 2026 : ¥ 190,839 million ¥ 188,750 million -1- Net assets per share Yen 4,025.86 3,986.78
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- 2 - 2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2026 - 65.00 - 75.00 140.00 Fiscal year ending March 31, 2027 - Fiscal year ending March 31, 2027 (Forecast) 75.00 - 75.00 150.00 Note: Revisions to the forecast of cash dividends most recently announced: None 3. Earnings Forecast of Consolidated financial results for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 128,000 7.9 16,700 4.3 16,500 (0.3) 11,000 1.5 232.25 Full year 290,000 15.1 40,000 10.3 39,000 2.0 26,000 2.7 548.95 Note: Revisions to the earnings forecasts most recently announced: None
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- 3 - * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 53,998,205 shares As of March 31, 2026 53,998,205 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 6,594,860 shares As of March 31, 2026 6,654,029 shares (iii) Average number of shares outstanding during the period Three months ended June 30, 2026 47,362,848 shares Three months ended June 30, 2025 48,172,127 shares Notes: The Company has introduced an Employee Shareholding Incentive Plan (E-Ship). The number of treasury shares at the end of the period includes shares of the Company held by the trust account established with a trust bank under the relevant plan specifically for the Starts Employee Stock Ownership Association. As of June 30, 2026: 768,700 shares Treasury shares deducted from issued shares in calculating the average number of shares outstanding during the period include the Company’s shares held by the trust account. As of June 30, 2026: 809,216 shares * Review of the attached quarterly consolidated financial statements by a certified public accountant or an audit firm: Yes (optional). * Proper use of earnings forecasts, and other special matters The earnings forecasts and other forward-looking statements in this document are based on information available to the Company and on certain assumptions deemed reasonable by the Company. Actual results may differ significantly from these forecasts due to various factors.
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- 4 - Quarterly Consolidated Financial Statements Quarterly Consolidated Balance Sheet (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 84,509 86,938 Notes and accounts receivable - trade, and contract assets 22,392 20,218 Real estate for sale 16,076 22,898 Real estate for sale in process 25,080 19,977 Costs on construction contracts in progress 2,424 2,913 Other 13,023 10,056 Allowance for doubtful accounts (515) (514) Total current assets 162,992 162,488 Non-current assets Property, plant and equipment Buildings and structures, net 59,655 59,071 Land 74,755 74,791 Other, net 12,040 12,633 Total property, plant and equipment 146,451 146,496 Intangible assets Software 4,185 4,313 Software in progress 2,035 2,182 Goodwill 137 76 Other 65 65 Total intangible assets 6,423 6,637 Investments and other assets Investment securities 18,562 18,608 Deferred tax assets 2,878 2,011 Other 15,733 15,849 Allowance for doubtful accounts (223) (228) Allowance for investment loss (71) (41) Total investments and other assets 36,879 36,198 Total non-current assets 189,754 189,333 Total assets 352,746 351,821
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- 5 - (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Accounts payable -trade and accounts payable for construction contracts 21,457 18,479 Short-term borrowings 6,904 11,694 Current portion of long-term borrowings 16,235 15,730 Income taxes payable 7,113 2,038 Contract liabilities 15,937 14,958 Provision for bonuses 3,167 1,805 Other 30,783 32,247 Total current liabilities 101,599 96,954 Non-current liabilities Long-term borrowings 44,550 44,917 Provision for retirement benefits for directors (and other officers) 1,223 1,265 Provision for warranties for completed construction 699 701 Provision for loss on lease business 255 250 Deferred tax liabilities for land revaluation 589 589 Retirement benefit liability 292 295 Asset retirement obligations 3,594 3,611 Other 7,369 7,219 Total non-current liabilities 58,575 58,851 Total liabilities 160,174 155,805 Net assets Shareholders' equity Share capital 11,039 11,039 Capital surplus 6,583 6,510 Retained earnings 182,746 184,695 Treasury shares (17,095) (16,809) Total shareholders' equity 183,273 185,435 Accumulated other comprehensive income Valuation difference on available-for-sale securities 2,779 2,779 Revaluation reserve for land 1,237 1,237 Foreign currency translation adjustment 500 577 Remeasurements of defined benefit plans 960 809 Total accumulated other comprehensive income 5,477 5,403 Non-controlling interests 3,820 5,176 Total net assets 192,571 196,015 Total liabilities and net assets 352,746 351,821
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- 6 - Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Net sales 59,415 62,214 Cost of sales 39,549 41,608 Gross profit 19,865 20,606 Selling, general and administrative expenses 11,520 12,610 Operating profit 8,345 7,995 Non-operating income Interest income 84 114 Dividend income 31 40 Foreign exchange gains － 303 Other 336 229 Total non-operating income 452 687 Non-operating expenses Interest expenses 150 195 Foreign exchange losses 414 － Provision of allowance for doubtful accounts 5 1 Other 36 20 Total non-operating expenses 605 217 Ordinary profit 8,192 8,465 Extraordinary income Gain on sale of non-current assets 55 20 Gain on sale of investment securities 0 3 Reversal of allowance for investment loss － 30 Other － 15 Total extraordinary income 56 69 Extraordinary losses Loss on retirement of non-current assets 14 76 Other 6 0 Total extraordinary losses 20 77 Profit before income taxes 8,227 8,457 Income taxes - current 1,916 1,892 Income taxes - deferred 1,065 920 Total income taxes 2,982 2,813 Profit 5,245 5,644 Profit attributable to non-controlling interests 118 87 Profit attributable to owners of parent 5,126 5,556
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- 7 - Quarterly Consolidated Statements of Comprehensive Income (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit 5,245 5,644 Other comprehensive income Valuation difference on available-for-sale securities 167 4 Foreign currency translation adjustment (471) 76 Remeasurements of defined benefit plans, net of tax (186) (153) Total other comprehensive income (489) (71) Comprehensive income 4,755 5,572 Comprehensive income attributable to Owners of parent 4,647 5,482 Non-controlling interests 108 89
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- 8 - Quarterly Consolidated Statements of Cash Flows (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Cash flows from operating activities Profit before income taxes 8,227 8,457 Depreciation 1,656 1,813 Loss (gain) on sale and retirement of property, plant and equipment (41) 56 Increase (decrease) in allowance for doubtful accounts 12 5 Increase (decrease) in provision for bonuses (1,430) (1,362) Increase (decrease) in net defined benefit asset and liability (18) (15) Increase (decrease) in provision for retirement benefits for directors (and other officers) 41 42 Interest and dividend income (115) (154) Interest expenses 150 195 Foreign exchange losses (gains) 414 (303) Decrease (increase) in trade receivables (140) 2,174 Decrease (increase) in inventories 27 (2,255) Increase (decrease) in trade payables (2,809) (2,991) Increase (decrease) in contract liabilities 53 (971) Decrease (increase) in other current assets 2,258 3,028 Increase (decrease) in other current liabilities 1,380 1,459 Other, net (546) (539) Subtotal 9,120 8,639 Interest and dividends received 151 146 Interest paid (150) (202) Income taxes paid (6,355) (6,748) Net cash provided by (used in) operating activities 2,766 1,836 Cash flows from investing activities Payments into time deposits (3,123) (711) Proceeds from withdrawal of time deposits 2,911 127 Purchase of property, plant and equipment (2,044) (1,387) Proceeds from sale of property, plant and equipment 65 51 Purchase of intangible assets (538) (595) Purchase of investment securities (416) (1,257) Proceeds from sale of investment securities 206 1,221 Loan advances (50) － Proceeds from collection of loans receivable 0 － Other, net 302 (75) Net cash provided by (used in) investing activities (2,685) (2,625)
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- 9 - (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Cash flows from financing activities Net increase (decrease) in short-term borrowings 5,250 4,790 Proceeds from long-term borrowings 4,129 3,365 Repayments of long-term borrowings (3,781) (3,502) Dividends paid (3,035) (3,515) Purchase of treasury shares (0) (0) Dividends paid to non-controlling interests (104) (130) Proceeds from capital contributions by investment partnership members － 1,350 Other, net (0) 77 Net cash provided by (used in) financing activities 2,456 2,433 Effect of exchange rate change on cash and cash equivalents (402) 133 Net increase (decrease) in cash and cash equivalents 2,134 1,777 Cash and cash equivalents at beginning of period 88,782 74,904 Cash and cash equivalents at end of period 90,917 76,682