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CEO Message

Management PhilosophyCreating Richness with Value to Society

Makoto Tani President & Chief Executive Officer Skylark Co., Ltd. Makoto Tani
President & Chief Executive Officer
Skylark Co., Ltd.

Please let me take this opportunity to thank our shareholders and investors for their continued support.

As you know, we saw a significant change to our shareholder composition in FY2017. Since we conducted an MBO with Nomura Principal Finance and delisted our stock in June 2006, we have been working on management reconstruction. In 2011, we began to pursue further reforms with funding from Bain Capital. However, in November 2017, Bain Capital sold off all of its holding in the Company, marking the end of the support from the fund shareholder that had continued for 11 years.

I would like to take this opportunity to express my sincere gratitude for our shareholders and investors for their support and patronage.

The global economic environment is changing markedly, and at an accelerating rate. Japan is also at a turning point, with changes in the economic environment, demographic situation, and consumption trends. The operating environment surrounding the food service industry is likely to grow more difficult. While a consumption tax hike is scheduled for 2019, food services are expected to be excluded from the targets of the increased tax rate. In addition, while the 2020 Tokyo Olympics and Paralympics are expected to have significant economic effects, we can say that the market will be uncertain thereafter.

To respond rapidly to these environmental changes, we have been strengthening our foundation for growth by taking measures including the development of new brands and remodeling (renewing restaurant designs to those that are in keeping with the times). In response to customer needs, we have been proactive in developing new brands that will contribute to the opening of new restaurants and brand conversion strategies in the future. In 2017, we opened La Ohana, which serves Hawaiian dishes, and Karayoshi, which specializes in fried chicken. Procedures for signing agreements for opening branches of these restaurants are making steady progress at present. At the same time, we are remodeling Aiya and Yumean, our brands of Japanese restaurant, and enhancing their menus in response to the growing demand for banquets and parties associated with changes in customers’ lifestyles. Further, in the delivery service business that is witnessing growing demand due to the increasing number of working women, aged households, and single-person households, we have begun testing the internal cross brand delivery system. We are achieving better results from the testing than expected. As a result of these diverse initiatives, we boast industry-leading profitability, with a ratio of operating profit to revenue of 8%, and high cash-creating capabilities.

The three years from 2018 through 2020 will be a very important period that will determine our future growth. I believe that we will need to make sufficient investments in improving restaurant ambience and work efficiency (productivity improvement) associated with employees’ work-style reform, so as to remain supported by customers while also achieving a steady increase in revenues and profits. To create restaurants that will be supported by customers, it is essential to offer customers the best experience at our restaurants. In 2018, we will remodel approximately 200 restaurants to modern-day designs. In addition, we will further direct investment and spending towards facilities in need of repairs, tableware, employee uniforms, and employee education and training, among other aspects. We believe that improving operating conditions at each individual restaurant will lead to customer satisfaction, and ultimately result in achieving sustainable growth. Regarding our plan to accelerate new store openings during the period from 2017 through 2019, the number of openings reached 97 in 2017, and is expected to reach approximately 100 in 2018.

Our basic policy on returns to shareholders is to pay dividends consistently, aiming for a payout ratio of 40% based on adjusted net income. Under this policy, we have declared year-end dividends of 22.00 yen per share (a total of 38.00 yen for the full year) for the fiscal year ended December 31, 2017. In addition, we will continue to provide shareholder benefits as part of our shareholder return measures.

We will make further efforts to increase the attractiveness of investment in our shares and thereby deepen your understanding of the Company, so that we can enjoy your continued support.

As we pursue these initiatives, I hope that we can rely on the continued support of all of our shareholders and investors.