REG - MOH Nippon PLC - Trading Update

MOH NipponAnnouncement

27/05/2025 07:00

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RNS Number : 2026K  MOH Nippon PLC  27 May 2025

27 May 2025

 

MOH Nippon Plc

("MOH Nippon" or the "Company")

 

Profit Warning and Trading Update

 

MOH Nippon Plc (LSE:MOH), a crowdfunding services provider for real estate
investment in Japan, announces a trading update ahead of the publication of
its final results for the period ended 31 March 2025. Given the change of
accounting year end of the Company from 30 April to 31 March this period
covers 11 months for the Company and 12 months for the operating subsidiary
Minnadeooyasan-Hanbai Co. Ltd ("MOH") (together the "Group").

 

Based on the directors of MOH Nippon ("Directors") preliminary assessment of
the unaudited consolidated management accounts of the Group for the period
ended 31 March 2025, the Company is expecting to record a loss of
approximately JPY 1,151 million compared with a profit of approximately JPY
2,077 million for MOH for the year ended 31 March 2024. During the year ended
31 March 2024, MOH generated revenues of JPY 11,107 million whereas during the
period ended 31 March 2025 revenues are expected to be JPY 4,009 million with
all of such revenue being generated in the first half.

 

As stated in the Company's interim results for the six months to 30 September
2024 ("Interims"), MOH completed a joint real estate development project, the
Soemon-cho project, with Toshi-Souken Invest Bank Inc ("TSIB"), a related
party, in Osaka, Japan, generating revenue of circa JPY 4.0 billion with JPY
2.1 billion derived from the real estate sale process and the remaining JPY
1.9 billion from related crowdfunding activities. Since September 2024, the
Group has not generated any revenues as new projects have been delayed which
in turn has halted crowdfunding activities. During this time, the Group has
continued to manage investors from 38 existing fund products and the Directors
believe negotiations on new projects are progressing well (for example in
relation to developing cold-chain logistics facilities incorporating the
patented FrostiX technology) with an anticipated return to revenue generation
from both real estate and crowdfunding activities in the current financial
year.

 

MOH made investments in three projects during the financial period from 1
April 2024 to 31 March 2025. A summary of the projects and related cash
outflows is provided below:

1.   Saipan Project - circa JPY 1.5 billion investment

This early-stage development project, based in Saipan, has been jointly
acquired and invested in by MOH and TSIB with MOH having put in an investment
of JPY 1.5 billion to date. The objective of this investment is to establish a
premium overseas destination that expands MOH's hospitality footprint and
provides long-term revenue diversification. Once operational, the project is
expected to generate recurring income through tourism and hospitality
services.

Progress: Although the project has experienced delays, the Directors
anticipate progress to be made over the summer.

2.   Toretore Project - circa JPY 9 million investment

Toretore Ichiba in Nanki Shirahama is one of the largest seafood markets in
western Japan, located in Shirahama Town, Wakayama Prefecture. It boasts a
wide variety of products, including freshly caught seafood from local fishing
ports, Wakayama's regional specialties, and seasonal vegetables and fruits as
well as a variety of restaurants and attractions for families and tour groups.

Through its investment in Toretore Ichiba, MOH aims to leverage the region's
abundant marine resources and, by utilising HybridIce technology, developed by
FrostiX, establish a cold chain industry originating from Japan.

Progress: The project has been delayed due to negotiations over the use of
public land. While an agreement on land use has now been reached, construction
is currently on hold due to a surge in building costs. The Directors
anticipate that the project will resume during Q3 2025.

3.   Soemon-cho Project - circa JPY 3.2 billion investment

The funds invested by MOH have been allocated to the redevelopment of a prime
commercial property in the Sōemonchō area of Osaka. It is intended that the
planned Hard Rock Hotel & Residences, located in Osaka's vibrant Minami
district, will feature a bold, rock-inspired exterior and striking neon
accents, making it a standout presence in the neighborhood. Situated at the
heart of Sōemonchō, the property is poised to become a landmark and a symbol
of this lively entertainment district.

 

The project aims to transform the site into a high-value, mixed-use
development that aligns with MOH's urban hospitality strategy. Over the
medium-to-long term, the investment is anticipated to deliver substantial
rental income and capital appreciation.

 

Progress: The first deal has been completed, and the first series investment
of JPY 1.8 billion has already generated JPY 4.0 billion for MOH during the
first half of the financial year.

 

The second series investment of JPY 1.4 billion is expected to generate a real
estate sale revenue during the current financial year along with related
crowdfunding revenues being raised in order for Toshi Souken Invest Fund Inc.
("TSIF"), a related party, to acquire the project from TSIB and MOH.

 

4.   Payment due to TSIB for Narita Projects #16, #17 & #18 construction
work - JPY 2.59 billion (accounts payable)

This amount represents a portion of the construction-related costs for MOH's
ongoing investment in the Narita site, a project carried out by TSIB. The
Narita Project envisions a mixed-use complex comprising hospitality
facilities, retail spaces, business centers, and logistics or data
infrastructure. Strategically located near the Narita Airport in Japan and
major transportation hubs, the project is positioned to become a key driver of
regional economic activity and a new landmark in the area. The payment is
intended to settle accounts payable to TSIB for construction work on-site,
subject to final approvals and the achievement of project milestones.

 

MOH sold real estate fund products related to the Narita Project from February
2021 to March 2024 generating income in the process. In the financial year
ended 31 March 2025, MOH fulfilled its contractual obligations associated with
projects #16, #17 and #18.

 

It is the intention of the Directors for MOH to continue to invest in the
Narita Project going forwards if an appropriate opportunity arises.

 

5.   Operating expenses for the period ended 31 March 2025 - circa JPY 2.1
billion

Of the total amount of JPY 2.1 billion, operating expenses for MOH NIPPON
accounted for approximately JPY 52 million, while MOH's operating expenses
amounted to JPY 2.06 billion. The primary expense for MOH during the period
was advertising and promotion, totaling JPY 1.58 billion, which represents
approximately 76.7% of MOH's total operating expenses.

 

As set out above, projects on which MOH has been working have been delayed
resulting in no revenue being generated during the second half of the year
ended 31 March 2025. The principal reasons for MOH not securing new projects
are as follows:

 

1.   As set out in the Interims, TSIB and MOH were looking to invest in real
estate developments in Canada. A specific project was identified, and
early-stage due diligence was undertaken. However, negotiations have been
terminated given the terms were not acceptable to the Company and the
Directors were of the view that insufficient revenues could be generated from
this project.

 

2.   Negotiations in relation to the Commercial Tuna Mariculture Project,
which is planned to incorporate cold-chain logistics facilities utilising the
patented FrostiX technology, have been delayed due to the death of the owner
of the business. As a result, the project is currently on hold while legal
matters are addressed in relation to the ownership of the Tuna Mariculture
Facility with the heirs.

 

3.   Rising real estate prices in Japan have made it increasingly
challenging to secure new investment deals beyond the projects already
contracted. Official land prices have continued to increase for the third
consecutive year, with the pace of growth accelerating. This trend is fueled
by heightened interest from wealthy foreign investors looking to invest in
Japanese real estate, especially in high-end properties in major cities such
as Tokyo, along with a strong rebound in tourism, which has revitalised
investment activity in the hotel sector.

 

4.   The Board is aware that the business suspension in July 2024 has had a
deeper impact than initially assessed and may continue to impact MOH's ability
to crowdfund and to implement its strategy with regard to investments in real
estate projects. To date, this has resulted in delays to certain projects as
well as negotiations with regard to new projects.

 

5.   In order to invest in new projects MOH requires funds. MOH anticipates
that it will secure sufficient funds to re-invest through the sale of land and
buildings related to its second series investment in the Sōemonchō Project.
Once secured, MOH will actively work to progress new projects as quickly as
possible, so that the timeline for crowd fundraising and investment can be
accelerated, with the goal of ultimately restoring the Company's profitability
to previous levels, which the Directors believe is achievable considering
MOH's long-established investor base.

 

The information contained in this announcement is based on the Directors'
preliminary assessment of the unaudited consolidated management accounts of
the Group for the period ended 31 March 2025, which remains subject to audit
and further internal review.

 

The Company expects to release its financial results for the period ended 31
March 2025 no later than 31 July 2025.

 

This announcement contains inside information for the purposes of Article 7 of
Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market
Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

 

The Directors of the Company take responsibility for the content of this
announcement.

Enquiries

 MOH Nippon Plc
 Frankie Leung, Chief Financial Officer  c/o +44 (0)20 4582 3500

 Cairn Financial Advisers LLP
 Emily Staples                           +44 (0)20 7213 0897
 Jo Turner                               +44 (0)20 7213 0885
 Louise O'Driscoll                       +44 (0)20 7213 0880

 Gracechurch Group
 Harry Chathli, Claire Norbury           +44 (0)20 4582 3500

 

Caution regarding forward looking statements

 

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Group's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward-looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

 

 

About MOH Nippon Plc

 

MOH Nippon was established as 'Bowen Fintech Plc' and listed on the Official
List of the Financial Conduct Authority as a special purpose acquisition
company to acquire businesses in the technology innovations market, with a
focus on companies that own products or applications that are relevant to the
financial services sector. On 19 August 2024, it acquired, via a reverse
takeover, 97.41% of Minnadeooyasan-Hanbai Co. Ltd, an established crowdfunding
services provider in the real estate market in Japan, from Kyosei Bank Co. Ltd
("KBC"), representing KBC's entire shareholding in MOH. KBC, an investment
holding company with a group of over 50 companies providing services in
various sectors, owns 80.69% of the issued share capital of MOH Nippon Plc and
is a related party of MOH.

 

 

 

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