Kyoei Security Service Co., Ltd. (TSE Standard: 7058) now expects a net loss of ¥600mn for the year ending July 2027. Its forecast of 11 September was a ¥700mn profit. The change comes from a ¥1.602bn special loss for officer retirement benefits, announced on 22 October.
What the charge covers
The company's 42nd annual shareholders' meeting approved a founder merit payment to a retiring director. The board then set the specific amount under company standards. The company also decided to introduce a system under its officer retirement benefit rules to pay benefits when officers retire. Together these lead the company to record a ¥1.602bn provision as a special loss in the year ending July 2027. The notice does not split the sum between the two items and does not name the recipient. A provision is an accounting charge, and the notice gives no payment timetable.
The recurring cost
Operating and ordinary profit guidance fall to ¥1.0bn from ¥1.17bn, a cut of ¥170mn, or 14.5%. The company ties the revision to a ¥135mn stock compensation expense and a ¥23mn provision under the new retirement system. Sales guidance is unchanged at ¥13bn, and so is the year-end dividend forecast. Earnings per share move from ¥483.65 to a loss of ¥403.16. The notice's prior-period reference figures cover a 16-month fiscal period, so they do not compare cleanly with a 12-month forecast.
The stock grant
The ¥135mn stock expense follows a board decision on the same day to dispose of 59,000 treasury shares to three directors, excluding audit committee members and outside directors. The allotment date is 20 November 2026. The shares are free to recipients and valued at ¥180.54mn, using the ¥3,060 close of 20 October. The plan approved at the shareholders' meeting allows up to 75,000 shares and ¥250mn a year, separate from the existing cash pay allowance. Transfer is restricted until the later of the director leaving the board and the filing of the half-year report for the fiscal year that contains the allotment date, and the company takes back the shares free if a director leaves without a justifiable reason. Kyoei also filed an extraordinary report on the disposal.