Advance Create Co.,Ltd. (TSE: 8798), an Osaka-based insurance agency, told investors on September 18 that its board had cut its full-year profit forecast for the year to September 2026 to a net loss of ¥391mn, reversing a previously guided ¥450mn profit, an ¥841mn swing. Revised sales guidance fell 10.0% to ¥7.15bn, operating-profit guidance fell 34.9% to ¥423mn and ordinary-profit guidance fell 42.0% to ¥319mn.
| Metric | Previous forecast | Revised forecast | Change |
|---|---|---|---|
| Sales | ¥7.95bn | ¥7.15bn | -¥796mn (-10.0%) |
| Operating profit | ¥650mn | ¥423mn | -¥227mn (-34.9%) |
| Ordinary profit | ¥550mn | ¥319mn | -¥231mn (-42.0%) |
| Net profit (loss) attributable to owners | ¥450mn profit | ¥391mn loss | -¥841mn |
The downgrade reflects both a soft nine-month operating run and one-off costs tied to an accounting investigation. In the nine months to June, revenue rose 0.4% to ¥4.86bn, while the operating loss narrowed to ¥271mn from ¥699mn a year earlier, the ordinary loss narrowed to ¥340mn from ¥859mn, and the net loss attributable to owners narrowed to ¥768mn from ¥1.41bn.
Those narrowing headline losses mask a balance-sheet problem. Shareholders' equity flipped negative, to a deficit of ¥276mn at June 30 from a positive ¥449mn at the prior fiscal year-end in September 2025, taking the equity ratio to -3.4% from 4.4%. Advance Create disclosed that circumstances exist raising material doubt about its ability to continue as a going concern, citing four consecutive years of operating, ordinary and net losses and three straight years of negative operating cash flow. Some of its receivables-securitization agreements with client banks also breached financial covenants. That does not trigger automatic default, but it lets the banks demand the buyback of already-executed securitized receivables, a right they agreed in December 2025 to waive after Advance Create finished repaying, in November 2025, a shortfall in the securitized receivables that arose from the restatement described below.
The costs behind the swing trace to a wholly owned advertising-agency subsidiary that runs the company's online insurance-comparison site. A third-party committee investigating suspected improper accounting in past advertising transactions and software asset capitalization at the subsidiary and at the parent delivered its findings on July 31, 2026, prompting Advance Create to restate prior-period financial statements. In the third quarter alone the company booked ¥274.5mn of special investigation costs and ¥3.5mn of restatement-related costs tied to the accounting probe. Separately, it booked a ¥206.0mn impairment charge reflecting reduced profitability at certain fixed assets, a ¥23.0mn debt-guarantee loss provision, a ¥22.2mn rental-contract cancellation loss and a ¥4.0mn lease-cancellation loss. Management's own reckoning shows that excluding those investigation and restatement costs together with other special gains and losses, net assets would have stood at a positive ¥144mn. The company's August disclosure estimated roughly ¥524mn in total investigation and restatement costs; it expects to book a further roughly ¥250mn of related costs in the full-year results.
The operating picture beneath the accounting story is mixed. The insurance-agency segment, still the core business, posted a narrower operating loss of ¥336mn on revenue of ¥3.43bn, down 2.6%, as new client meetings slowed. The media business built around the insurance-comparison site under investigation saw revenue collapse 71.4% to ¥198mn as advertisers pulled back, while the media-rep unit's revenue rose 137.2% to ¥868mn but swung to an ¥85mn operating loss on higher outsourcing costs. Cash and deposits fell ¥2.87bn over the nine months, to ¥2.47bn. Advance Create will pay no interim dividend and has suspended its shareholder-benefit programme for a second straight year.