Top Management Message
Financial Strategy According to the CFO: R&D Investment and Fund Procurement
1. Securing Funding to Invest in Growth
Capcom believes now is the right time for investing in growth. We are therefore aiming to increase our net cash position further by maximizingour free cash flows and making investments in development.
In order to fulfill this policy, we will institute two new financial strategies focused on generating cash flows through process management. The first strategy is to take a thorough approach to managing the recovery of investments. In this regard, we will expand current title-by-title investment management system using a comparable category-by-category database based on information covering our brands and producers. The second strategy is to maximize working capital efficiency. Under this strategy, we will expand our business-by-business investor capital management system and establish a framework to manage our investment turnover period and turnover ratio in a more visible manner.
Net cash generated in the year ended March 2012 was 11,300 million yen, marking a decrease of 16,300 million yen over the previous fiscal year, due to factors including the lack of major titles.
Nevertheless, analysis of past fiscal years shows that our net cash position, or cash deposits less interest-bearing debt, as of the fiscal year ended March 1996 was negative 66,200 million yen. Considering that our net cash position in the year ended March 2012 was 11,300 million yen, this represents an improvement of nearly 77,500 million yen over the past 15 years.
2. Increasing Shareholder Returns
Net Cash on Historical Basis
Capcom believes it is important to provide returns to shareholders and seeks to: (1) enhance corporate value by achieving growth through investments and other means and (2) maintain stable dividend payments commensurate with business performance.
For the year ended March 2012, the total annual dividend was 40 yen, the same as the previous fiscal year. As a result, our payout ratio was 34.5%.
Following analysis of past fiscal years, Capcom paid 20 yen per share from the year ended March 1998 to the year ended March 2006. From the year ended March 2007, we increased dividends to 30 yen per share as the structural reforms enabled us to establish a stable profit base. Since the year ended March 2009, we had been paying 35 yen per share, but as of the year ended March 2011, we are paying a dividend of 40 yen per share.
We have also acquired approximately 13,000 million yen in treasury stock since the year ended March 2004. We will seek further improvement in net cash to continue strengthening investments for growth and to deliver returns to shareholders.