Advance Create Cuts Nine-Month Operating Loss to ¥271 Million, but Net Assets Turn Negative

A flat top line and a smaller loss

Advance Create Co., Ltd. (TSE: 8798), an insurance agency that also runs insurance-industry software, media, media-representation and reinsurance businesses and is listed in Tokyo, Sapporo and Fukuoka, published consolidated results for the nine months from October 1, 2025 to June 30, 2026 on September 18, 2026 under Japanese GAAP. Revenue rose 0.4% to ¥4,855 million. The operating loss narrowed to ¥271 million from ¥699 million, the ordinary loss to ¥340 million from ¥859 million, and the net loss attributable to owners of the parent to ¥768 million from ¥1,405 million. The loss per share was ¥10.30 against ¥62.70.

The improvement came from costs, not sales. Cost of sales rose 13.4% to ¥1,243 million, so gross profit fell 3.4% to ¥3,612 million and the gross margin slipped to 74.4% from 77.3%. Selling, general and administrative expenses, however, were cut 12.5% to ¥3,884 million, ¥554 million less than a year earlier, which more than covers the ¥427 million reduction in the operating loss. Below the operating line, non-operating expenses fell to ¥131 million from ¥200 million as payment fees dropped to ¥15 million from ¥98 million, even though interest expense rose to ¥83 million from ¥63 million and the amortisation of share issuance costs rose to ¥27 million.

Extraordinary items still weighed heavily. The company booked ¥111 million of extraordinary income, mainly ¥70 million of compensation received and a ¥41 million reversal of asset retirement obligations, against ¥533 million of extraordinary losses: ¥274 million of special investigation costs, a ¥205 million impairment in the insurance agency segment on lower profitability, ¥23 million added to the provision for losses on debt guarantees and ¥22 million on terminating a lease. The pre-tax loss was ¥762 million against ¥1,368 million. The filing attributes the smaller net loss partly to lower impairment losses, although its own income statement shows impairment of ¥205 million against ¥185 million a year earlier.

Segments: the agency loses less, media shrinks

The Insurance Agency segment, which includes ¥148 million of sales to other segments, saw revenue fall 2.6% to ¥3,425 million because appointment numbers stalled and fewer new consultations followed; life insurance supplied ¥3,070 million of it and non-life insurance ¥354 million. Lower SG&A cut the segment loss to ¥336 million from ¥974 million. In ASP, new sales of its common insurance-industry platform to multi-carrier agencies were sluggish: revenue fell 1.4% to ¥221 million and segment profit 13.3% to ¥75 million.

Media, built around the company's insurance-comparison website, suffered from weak advertising placements: revenue fell 71.4% to ¥198 million and profit 83.7% to ¥21 million. Media Rep moved the other way, with firm orders lifting revenue 137.2% to ¥868 million, but higher outsourcing costs widened its loss to ¥85 million from ¥26 million. Reinsurance revenue rose 3.1% to ¥789 million on steady volumes, while higher reinsurance payouts cut its profit 25.6% to ¥35 million. Intersegment sales of ¥646 million are eliminated on consolidation.

Net assets turn negative

Total assets fell ¥2,029 million to ¥8,183 million from September 30, 2025. Cash and deposits dropped ¥2,870 million to ¥2,468 million, while accounts receivable rose ¥379 million and a ¥761 million adjustment account for receivables securitisation appeared on the asset side. Liabilities fell ¥1,303 million to ¥8,459 million, mainly because the ¥1,152 million securitisation adjustment account on the liability side was cleared; short-term borrowings stood at ¥4,688 million. The net loss took net assets down ¥726 million to minus ¥276 million, so the group is now in a net-liability position, with an equity ratio of −3.4% against 4.4% at the fiscal year-end. No cash-flow statement was prepared for the period; depreciation was ¥48 million.

A going-concern note and a restatement

The company again records material uncertainty about its ability to continue as a going concern. It had posted operating, ordinary and net losses for four consecutive years through FY9/2025, when the operating loss was ¥286 million and the net loss ¥1,183 million, together with three consecutive years of negative operating cash flow. It now also has negative net assets and has breached financial covenants in receivables-securitisation contracts with some lenders. Those contracts do not accelerate repayment, but they allow the lenders to demand repurchase of securitised receivables; the company says the lenders agreed in December 2025 to waive that right, after it had repaid in November 2025 the gap created by correcting its agency-commission revenue. Its planned remedies are better marketing to win appointments, higher sales productivity and lower fixed costs. The auditor's review report also draws attention to the uncertainty, while its conclusion is not modified.

According to the subsequent-events note, a third-party committee investigating suspected improper accounting in some past advertising transactions and software capitalisation at the company and its wholly owned advertising-agency subsidiary delivered its report on July 31, 2026, and prior-year results were restated. ¥278 million of investigation and restatement costs was booked as an extraordinary loss in the third quarter, and the company expects about ¥250 million more in the full-year results. The restatement also formally breaches representations on the accuracy of its financial statements in some loan agreements, an impact the company describes as limited.

Guidance revised; dividend undecided

On the same day as these results, the company revised the full-year FY9/2026 forecast it had published on November 14, 2025; the tanshin gives only the new figures and refers to a separate release for the details. The company now expects revenue of ¥7,154 million (+3.4%), operating profit of ¥423 million, ordinary profit of ¥319 million and a net loss of ¥391 million, or ¥5.23 per share. Reaching that operating profit after a ¥271 million loss over nine months implies about ¥694 million in the fourth quarter alone; the tanshin does not break the forecast down by quarter. No interim dividend was paid and the year-end dividend is undecided, after zero for FY9/2025. Common shares in issue rose to 37,468,200 from 32,468,200, while 32,186,700 of the 37,186,700 Class A shares issued on September 5, 2025 remain outstanding; the average share count used for per-share figures was 74,627,006 against 22,407,959, which is why the loss per share fell much faster than the net loss.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.