It is now time for Marui Group financial results briefing for the Second Quarter of the Fiscal Year Ending March 31st, 2023. Thank you very much for taking time out of your busy schedule to attend today's meeting. Today's presentation materials can be downloaded from our corporate website. Please refer to overview of performance in six months ended September 30th, 2022, and future direction. Today, we would like to explain our financial results for about 30 minutes and then take your questions. We are using a conference call system during questions and answers session. Please note that the recording of this presentation will be available on our website at a later date. Let me introduce today's speakers. Hirotsugu Kato, CFO, will give an overview of the financial results for six months ended September 2022, and progress of the medium-term management plan.
Masahiro Aono, President of Marui, and Yoshinori Saito, President of EPOS Card, will explain the future direction of retailing and Fintech segments. In addition to these three speakers, Ms. Kutsukake, General Manager of IR Department, will be available to answer questions. These are contents of today's meeting. First, CFO Kato will give an overview of the financial results for the six months ended September 2022 and the status of each segment.
My name is Kato. I will now present an overview of the financial results and the outlook. They are the contents I will be explaining today. Let me start with consolidated performance. There are four highlight points for the financial results. As I explain in detail later, the fact that the Fintech segment has maintained a high growth rate for the transactions and revenue offsets retailing segment, which has not recovered to pre-COVID level.
As a result, total transactions have reached a record high and consolidated profit has almost recovered to pre-COVID-19 level. EPS also reached all-time high due in part to our effective capital policy. Let me talk about main financial indicators. Total group transactions reached JPY 1,892.4 billion, a record high for the first half, and operating income and net income have almost returned to pre-COVID-19 levels. EPS also reached JPY 67 in the first half, breaking a record high for the first time in three years. This is revenue and operating income by segment. Retailing revenue was down due to the reduction of private brand specialty stores, but operating income increased by JPY 0.8 billion. Fintech recorded the first increase in revenue and profit in three years due to transaction increase.
Though retailing profit level hasn't returned to the pre-COVID-19 level, Fintech has steadily increased its profit every year since the start of pandemic. Looking at the operating income for each segment compared to the year ended March 2019, which is before COVID-19, retailing decreased by JPY 3.6 billion, while Fintech increased by JPY 3.7 billion, almost offsetting each other. Next, this is a breakdown of changes in operating income. Operating income for the first half of the year increased JPY 1.3 billion year-over-year. Extraordinary factors include impacts from JPY 1.1 billion of fixed cost while stores were closed, transferred to extraordinary loss, and JPY 0.3 billion of liquidated account receivables.
Excluding these extraordinary factors, the actual increase in operating income was JPY 2.1 billion, with increase of JPY 1.9 billion in retailing and JPY 0.7 billion in Fintech. Eliminations increased by about JPY 0.5 billion due to personnel expenses for the co-creative investment. Next, I will explain the status of retailing segment. This is a breakdown of changes in retailing operating income. Operating income increased by JPY 0.8 billion in the first half, of which JPY 1.1 billion was due to extraordinary factor of transferring fixed cost while stores were closed to extraordinary loss. Excluding this extraordinary factor, the actual increase in operating income was JPY 1.9 billion. The breakdown is the gross profit increase of JPY 0.4 billion and cost reduction of JPY 1.8 billion.
On the other hand, electricity cost was a negative factor of JPY 0.3 billion caused by rising fuel costs and other factors. Here are quarterly revenue and operating income. Despite an increase in commission due to growth in e-commerce transactions, sales decreased resulting from the reduction of specialty stores. As a result, revenue decreased by JPY 1.3 billion to JPY 18.2 billion. Operating income was JPY 0.3 billion, an increase of JPY 0.1 billion from the previous year due to the significant impact of the electricity price hike on the second quarter. This is the status of store visitors. The number of store visitors reached 80 million, 1.2 times that of the previous year, and is on track to reach the full-year target of 170 million.
We plan to increase the store visitors by an average of 10% per year during the period of medium-term management plan by further increasing the composition of non-retail tenants, which have a large number of store visitors. This is the progress of store space that doesn't sell. The floor space composition of non-retail tenants increased by 5% year-on-year to 51%, making a steady category shift. We are proceeding with tenant development with a plan to increase the percentage of non-retail tenants to 56% by the end of the fiscal year ending March 2023, and to 70% by the fiscal year ending March 2026. This is e-commerce transactions.
In October last year, we started a team of 11 members in charge of UI dedicated to e-commerce website, including 3 specialists, and we have further increased the number of specialists to seven this year to improve UI and UX. As a result, transaction volume has been on a recovery trend since the second half of the last year, and in the second quarter this year, it further increased from the first quarter to 110% year-over-year. Next, let me turn to the status of Fintech segment. This is a breakdown of year-on-year change in Fintech operating income.
Although the growth in new cardholders increased upfront investments such as card issuance costs, referred to as variable cost two in this chart, the increase in revenue due to the growth in transactions absorbed the increase in variable costs, resulting in an increase in operating income by JPY 1 billion to JPY 24.8 billion. This is card credit transactions. Transactions for the second quarter was JPY 877.6 billion, 119% of the previous year. This is a new record high, as explained earlier. The transaction volume for the third quarter is expected to reach almost JPY 1 trillion if this pace continues. This is the breakdown of card credit transactions.
Rent, e-commerce, and regular payments, which have been strategically strengthened to maximize the share of household finances, continue to perform well, while travel and entertainment, commercial facilities and food also has grown from the previous year. Travel and entertainment, hit hard by COVID-19, has recovered to higher than pre-COVID level in the first half of the year. If the current growth rate is maintained, we expect to achieve the target of JPY 3.6 trillion for the fiscal year ending March 2023, and the plan of JPY 5.3 trillion for the year ending March 2026. This is year-on-year change in installment and revolving transactions. Since we started to actively promote installment payments, transactions of revolving and installment payments combined has been growing by double digits, except for when pandemic impact was huge.
Revolving payments alone did not grow by double digits for a while. However, growth of the revolving payments alone was 12% year-over-year for the first half, the first double-digit growth in five years. As a result of high growth in both installment and revolving transactions, the installment balance continued to grow and revolving balance also increased, bringing the total installment and revolving balance, including liquidated accounts receivable to JPY 382.1 billion, a record high since EPOS Card was issued. Next is the balance of cash advance receivables. After COVID-19 hit, the balance had been on a decline, but it bottomed out in the fiscal year ended March 2022 and turned to increase this first half for the first time in three years. As a result, revenue is expected to increase going forward.
The number of new cardholders increased by 80,000 year-over-year to 350,000, mainly due to an increase in applications in commercial facilities after a significant drop due to pandemic and an increase in online applications for the cards tailored to each individual's interests. New cardholders for cards tailored to each individual's interests accounts for 36% of the total, increased from 18% last year, mainly due to an increase in the number of card designs and continued strong performance of Chiikawa and Harajuku Lovers cards. The number of cardholders at the end of September 2022 increased by 150,000 year-over-year to a record high of 7.21 million, mainly due to a steady increase in new cardholders. We expect the number to be 7.3 million for the end of March 2023.
The composition of cardholders with high usage rates, such as cards tailored to each individual's interests, is expected to grow to 53%, making a steady shift to be used as main cards. Bad debt write-offs. Although the balance of receivables at the end of the period increased a lot with the growth in transactions, the ratio of bad debt write-offs improved significantly to 0.85%, down 0.11% from last year, as the amount of bad debt write-offs remained at the same level. This is the status of interest repayments. The repayment claims received, a leading indicator, has been continuously lower than the previous year since the second quarter last year. Accordingly, the interest repayment amount is also on the decline, but we continue to monitor the situation closely. Next, let me turn to co-creative investment.
Co-creative investments made in the first half of this year was JPY 1.1 billion. This makes the total investment amount since the fiscal year ended March 2017 to JPY 23.4 billion. Next, let me talk about earnings contributions from co-creative investments to main business. The earnings contributions to main business were JPY 0.6 billion, and we target JPY 1.5 billion for the full year. The IRR is 18%, exceeding the hurdle rate of 10%. Next, balance sheet and cash flow. This is the status of balance sheet. Total assets increased by JPY 35.2 billion to JPY 955.2 billion, mainly due to JPY 27.7 billion increase in operating receivables from the end of March 2022. Capital allocation.
Out of JPY 22.3 billion in core operating cash flow, JPY 4.7 billion was allocated to investment for growth, JPY 3.8 billion for share buybacks, and JPY 5.2 billion for dividends, making a total allocation of JPY 13.7 billion. Human capital investments, including those reported as expenses, amounted to JPY 3.9 billion, accounting for 22% of personnel expenses. Finally, I would like to explain the full year forecast. Our forecast remains unchanged with EPS JPY 109.3, ROE 8.4%, and ROIC 3.5%, mainly because the second quarter has been generally in line with our expectations. There's also no change in the segment operating income forecasts. That is all from me. Thank you very much.
We will now continue with the explanation of our future direction based on the dialogues with our shareholders and investors. First, President Aono of Marui Co, Ltd will explain our retailing segment.
This is Aono. Let me go through retailing segment. For retailing, I will explain the progress and future direction of the two pillars of our strategy, namely stores that don't sell and eventful stores. Stores that don't sell is an initiative to transform the stores into a platform where offline and online integrate. Over the past year and a half, the number of internet-originated tenants have expanded and the number of experience-oriented tenants as well. As a result of co-creation with our business partners, the stores are attracting more customers.
Due to COVID-19, offline-only tenants have seen a decline in customers, while online-only tenants have seen their CPA soar. On the other hand, tenants that have both offline and online channels are gaining new customers and improving their business performance. Inorganic, which had been operating only online, opened its first real store in Marui and increased its visibility and dramatically expanded its business performance. The number of its customers is 1.4 times that of tenants on the same floor. Realizing the value of a real store, the company opened two other stores outside Marui, where Marui employees have been entrusted with the management of the stores. The number of tenants originating from online stores has expanded to various categories, reaching 80 zones at the end of the first half of the year. The number of experience-oriented stores is also expanding.
Conventional tenants rely on their stores to attract customers, but with experience-oriented stores, customers make reservations in advance and the tenants themselves attract customers. A purchase specialty store, Ecolinks, opened a store in Kinshicho, and its unit prices have increased because customers feel secure in coming to the store and can effectively use the waiting time. As a result, the number of its customers is three times that of other tenants on the same floor. In response to the needs of local customers, the number of such experience-oriented stores was expanded to 600 zones by the end of the first half. We will continue to expand the number of experience-oriented tenants that attract customers on their own. Although we are currently in the phase of recovery from COVID-19, traditional retail stores which only focus on goods will shrink in the long term.
Conversely, the need for experience-oriented stores will continue to grow even after COVID-19 ends. Tenants such as Thorium Classes and drone schools, which were unthinkable in the past, have opened in 60 zones in Marui and will continue to expand in the future. The need for mental and physical health services is increasing and the growth of the stores that don't sell will continue to accelerate as new tenants are added. In the first half, the number of non-retail tenants was 1.5 times that of retail tenants. We will expand the area of non-retail space to 70% by the fiscal year ending March 2026, and we expect the number of customers entering our stores to reach 210 million. Stores that don't sell will improve their appeal to customers and will continue to evolve. The next step is to create eventful stores.
We are working to create a store where various limited time events motivate customers to visit the store. As a result, the number of customers has increased over the past 18 months, contributing not only to retail, but also to fintech revenues. Events benefit not only customers, but also business partners. The average contract time for tenants is three years, but events are two weeks and have no initial cost. The rent per tsubo is high, but the actual amount to open a store is extremely low cost. Against this backdrop, we are seeing an increasing number of business partners who want to open a store at our events. In the first half, we held 2,400 events despite COVID-19. The number of customers per tsubo is 1.4 times that of tenants for events.
Due to the increase in new customers, events had 9 times the number of EPOS card enrollments per 10,000 customers compared to tenants. As a result, the number of new EPOS cardholders expanded to 160,000 in the first half. In addition, events that have expanded not only inside Marui, but also outside. During the first half, we received positive feedback on popular content such as Evangelion at outside commercial facilities. This year, we will hold 220 external events to more than double the number of the previous year and acquire 19,000 new cardholders. Events will expand not only store revenues, but also EC transactions. In the first half, we held an event at The Japanese Sword Museum, which is a museum of swords.
As you can see in the photo, the store was packed with highly enthusiastic customers, generating in-store revenue of JPY 40 million. Customers who were too far away to come to the event or those who missed the event purchased items on the EC, resulting in EC transactions worth JPY 40 million. By connecting stores and EC in this manner, the event turnover can be expanded to JPY 25 billion in stores and JPY 5 billion in EC in the fiscal year ending March 2026. The development of business partners is essential to the expansion of these events. We utilize digital technology for this. OMEMIE, launched last year, allows lands and facilities to be viewed entirely online and contracts to be completed online. The number of OMEMIE-based outlets expanded from 4% last year to 18% in the first half of this year.
Of the 400 companies that have used our services, 100 have opened their stores for the first time, expanding new business partners of the young generation. By promoting eventful store openings, we can increase revenues by JPY 3 billion and add 200,000 cardholders by the final year. Creating stores that do not sell and creating eventful stores will contribute JPY 3 billion each to our revenue. In addition, we will achieve operating income of JPY 12 billion for the fiscal year ending March 2026 through a systematic reduction of expenses. This concludes my presentation.
Next, Mr. Saito, President of EPOS Card, will cover the fintech segment.
Thank you for your introduction. I will talk about the future direction of the fintech segment, including new initiatives for future growth and efforts to improve customer engagement.
First of all, I'd like to talk about BNPL, EPOS Smartphone Cards, and Owner Cards as new initiatives for the second half and beyond. The domestic market of BNPL is now around JPY 1 trillion, and it will double to JPY 2 trillion in the next 5 years. The BNPL service is mainly provided to major payment processing companies, but is expected to be introduced by more companies, including credit card companies in the future. BNPL, provided by EPOS Card and named BNPL by EPOS, will serve as a gateway to EPOS Card members for minors and those who do not have a credit card while providing a new payment option to existing EPOS Card members, thereby promoting the use of EC. This BNPL will be introduced as a service that can be completed entirely with a smartphone.
Payment is made by cell phone number and date of birth, and payment is completed by presenting the barcode displayed on the smartphone at a convenience store. The service will also offer installment payments and points, and will be launched as a unique service. We will start with Marui, our web channel, in December this year, and then extend it to business partners and work to develop a wide range of EC member stores. 5 years from now, we aim to achieve transaction of over JPY 50 billion and a cumulative total of over 300,000 new cards with BNPL. The next point is the EPOS Smartphone Card.
The strength of EPOS Card is instant issuance and instant use at stores, and currently, we issue 270,000 new cards annually at 62 commercial facilities nationwide, and we introduced the new smartphone card in October as a digital version of instant issuance and instant use. In our preliminary conversation with customers, they told that the digital card would sound like a virtual currency, and since they pay with their smartphones, smartphone card would make more sense, so the name was decided through such interaction. Customers also hoped that the name would indicate not having to pick up their wallets for online payments and address their resistance to taking out their cards on the train. Currently, some people wanting to hold a new card through our easy services give up halfway through because they need to wait until the card is made for payment.
This will be an opportunity loss. In the future, cards will be issued digitally and used instantly, resulting in eliminating such opportunity loss and increase in new cardholders. In addition, we will be the first in this industry to address online applications and usage 24/7. Our business partners are also requesting the same, so we will reinforce our development efforts. This is our smartphone card plan. This service can be used by existing members through an application. In the first month since its launch, more than 40,000 members have applied for membership without any particular promotions. With this increase in new members and the use of existing members, we expect more than 2 million customers over the next five years.
In addition, we estimate that the increase in transactions through the internet and convenience stores will have the effect of boosting LTV by more than JPY 10 billion. Next, I'd like to talk about the Owner Card. Until now, EPOS Card has not issued cards for corporate customers. Last year, we started considering the development of a corporate card as a voluntary project of the Marui Group, which links together diverse human resources. After proposing specific service content through dialogue with startups and many other company owners, we established a dedicated organization at EPOS Card to study the commercialization of this project. We have heard that in many cases financial support is insufficient for small to small businesses that have just started up until they have built up credit.
Based on the concept of two layers of credit, our Owner Card business will work to co-create new credit for business owners by issuing cards that can support their businesses based on their personal credit. While general corporate cards are mainly intended for employees of large companies to support their business operations, such as business efficiency and expense reimbursement, the Owner Card is intended for top business owners among EPOS Card members and will be offered as a service to directly support their businesses. We will start a trial with about 100 companies in the second half of this year and aim to start full-scale operation in the second half of next year.
Based on credit card information, we estimate that there are approximately 100,000 to 150,000 target members, including company owners, and we also plan to make proposals to the managers of our investment partners for co-creation. Next, our efforts to improve customer engagement. First, let me give you an example of our recent initiatives. The HERALBONY cards and the EPOS TOGETHER cards issued last year have been well received as they automatically link points to donations and support, and the amount of use after enrollment is high, resulting in a steady membership expansion. While customers appreciate the fact that they can support by using their cards, they also say that they cannot participate with other cards, and it is troublesome to go through the procedures each time.
In addition, interest in social issues is growing year by year, and the transaction of EPOS Card donations and support have quadrupled over the first three years. On the other hand, 70% of all respondents of our survey answered that they are not able to take action on social issues, and there is a gap between awareness and action. Furthermore, in the domestic credit card industry, the competition to acquire members by offering attractive points is heating up. This trend seems to be escalating every year. With this background, we will provide a great user experience to customers, as well as proposing new ways to utilize points in the future. In addition, in light of the gap between awareness and action on social issues, we intend to increase our customer engagement by providing easier-to-use options for support.
As a specific initiative, we will introduce a new point service next year. This service allows customers to select a recipient of support that is of interest to them and automatically allocate a certain percentage of their monthly points through a donation, investment, and so on. Since cards used for donations and investments have high LTV, we will aim to both support customers' sustainable lifestyles and increase corporate value with our new point service. Finally, through the new initiatives that I have described, we hope to further accelerate our efforts to realize the impact that the Marui Group is aiming for. Thank you very much for your attention.
Let us now begin Q&A session. Now we have the first person to ask questions, Mr. Takahashi from Mizuho Securities.
This is Takahashi from Mizuho Securities. Thank you very much for your detailed explanation. I would like to ask two brief questions, each for President Aono and President Saito. First question for President Aono. Looking at the results for the first half, I think the biggest change is in e-commerce area. You mentioned earlier how e-commerce was linked with Eventful Stores. Could you tell us what has been driving e-commerce revenue or number of customers? Could you elaborate on why revenue from e-commerce is increasing? On top of that, given your earlier explanation and this increase in e-commerce revenue, I think you should be able to generate more profit.
In the first half, as shown on page 11 during Mr. Kato's explanation, gross profit was up by JPY 0.4 billion and cost reductions amounted to JPY 1.8 billion. It seems that after the first half this year, you have already achieved more than half of JPY 3 billion cost reduction target for the medium-term management plan. Please give me a supplemental explanation as to whether the still-changing structure of stores is not leading to an increase in gross profit, or whether there's some other extraordinary factor and what we should expect from the perspective of profit.
Thank you for your questions. Now I, Aono, will answer your questions. First, let me explain the reason for the growth of e-commerce. As I said during the last presentation, we have been striving to improve UI and UX, mainly with our dedicated specialist personnel for online systems.
Through SEO measures and various other improvements, the number of visitors has increased by 20% since the fourth quarter of last year, and the number increased by 33% in the first half of this year. This suggests that an increase in the number of new customers contributed to increasing transactions. In addition, e-commerce transactions linked with stores have grown 1.8 times compared to last year to JPY 0.6 billion in the first half of this year. It is growing due to the combination of improvement of product contents and UX.
Sorry, my question was not clear enough. I think already understand what you have just explained, but what kind of products and services are performing well in e-commerce? My question is about merchandise.
For merchandise, we are seeing growth, particularly in non-clothing items, including cosmetics. Clothing is growing, of course, but we are also seeing growth in other merchandise such as cosmetics, animation, and entertainment due to the increase of new customers. Let me elaborate more on your concern about profit. I said earlier that gross profit increased by JPY 0.4 billion, but on the other hand, there's the impact of store closures. Since there was a negative impact of JPY 0.5 billion due to the closure of stores and the reduction of specialty stores, so the actual income from existing stores increased by JPY 0.9 billion. As for JPY 1.8 billion in cost reductions mentioned earlier, as we increase JPY 3 billion of revenues from tenants, some will be reported as gross profit and others as SG&A expenses. The large amount will be reversed and included in SG&A expenses.
Therefore, this JPY 1.8 billion includes the revenue from tenants covering the expenses.
Thank you very much. In that sense, I understand that the reform of existing stores has been effective in the first half of the year.
Yes, we are doing well, and we believe that we can make additional growth in this area for the second half of the year.
Thank you very much. I would like to make a request to Mr. Kato and Ms. Kutsukake. What you just said has given me clearer understanding, so I would appreciate it if you could disclose your gross profit separately next time. This is a request. I have two questions for President Saito as well. During Mr. Kato's part earlier, he explained in which areas revenue is recovering from 2019.
I think I understand the overall picture to some extent, but I would like to know what changes you have observed in terms of recovery after six months of managing the company. For example, have you seen a better recovery with your loyal customers, or have you seen an increase in the number of new cardholders? I appreciate it if you could tell me any changes you have noticed. I was also interested in your new initiatives such as BNPL and the corporate cards. I don't think we need to worry about it too much, but please tell us what you are thinking about in terms of credit management and risk management in these new areas of finance. Thank you.
Let me address your first question about transaction recovery. As Mr. Kato explained earlier, people's activities, including going out and paying with cards, were significantly constrained last year and the year before. Therefore, the first half of this year saw a clear rebound from such an environment. This is shown in the robust recovery of travel and entertainment, commercial facilities and food.
You are right, Mr. Takashi, we are finally seeing a gradual recovery in the number of new cardholders, and we expect that transactions of new cardholders will also increase strongly going forward. Does it answer your question?
Yes, thank you.
Your question about risk management of the new initiatives. As you may have read in the newspaper today, we believe that we must have a robust credit system in place as a company, as we are launching initiatives such as BNPL.
For security, it means, for instance, one-time password to verify the identity of users and step-up approach that allows customers to start with a small payment amount and gradually increase their credit to expand the scope of usage, so as not to take too much risk at the beginning. The other major feature of BNPL is API connection with e-commerce merchants, which will allow us to connect various types of customer information. These are the measures we are taking to have robust risk management in place.
Thank you. Regarding the second point you just mentioned, I understand that your company's unique know-how will be utilized, which has been used for many years with EPOS Card, and that you will also work closely with e-commerce merchants around the system and security. Is it safe to assume that if you utilize resources properly, those new initiatives will be up and running smoothly?
It may not be that easy, though. I think it is fine to understand it that way.
Okay, thank you.
Now, we would like to take our next question. Mr. Kanamori from Okasan Securities, please.
This is Kanamori. Can you hear me?
Yes, we hear you.
Okay, thank you. I have two questions. I think this was probably discussed at the financial results briefing for the first quarter, and it's related to earlier questions today. Looking at the year-to-date results for retailing business through the second quarter, both revenue and gross profit from tenants with fixed term rental contracts have decreased. In your explanation for the first quarter, I think you said that the tenant mix and fixed rents were factors that led to an increase in transactions but a decrease in gross profit. I think that's what you said. Are the figures today within your expectations? Could you please explain the background again with more detail?
Thank you, and let me answer your question. First, if you are asking whether they are within or outside our expectations, they are within our expectations. The biggest reason for the year-over-year decline in gross profit from fixed term rental contracts is the impact of store closures, but that is not the only reason. In detail, the effect of remodeling by replacing tenants turns positive in the second half of the year.
Understood. The other question is about fintech. This may be another topic that was discussed during the financial results briefing for the first quarter. I think there's a waterfall chart that shows the impact of variable costs. One of the questions that was asked during the first quarter briefing was that the number of new cardholders had increased, but the profit progress didn't seem to be very well. The answer to that question was that the number of new cardholders had increased more than expected, so the related expenses also increased.
This has been explained today, but I think it was also mentioned at the time that there was a cost for cards tailored to each individual's interests. Is it fine to understand the number of new cardholders in the second quarter grew more than expected? Could you please explain how we should understand the progress in terms of expenses?
Yes. Thank you for your question. The number of new cardholders during the first half this year totaled 350,000, which was slightly higher than our expectation. As for overall expenses, our assumption was that the number of cardholders would increase from the beginning of the year, so we estimated revenue and profit based on the assumption that card issuance costs would increase. In that sense, we believe that this increase or decrease is almost within our expectations.
Okay. That is all from me. Thank you very much.
Thank you very much. Now I'd like to move on to the next question. Mr. Tsujino of Daiwa Securities Co Ltd.
I have a follow-up question in relation to Mr. Kanamori's and Mr. Takahashi's questions. When you look at tenants with fixed term rental contracts, their sales increased by about 22% while your rental income decreased slightly. This increase of sales has nothing to do with store closures, but because their transaction volume has increased by 22% and rental income from tenants with fixed term contracts has decreased, the company's so-called rent-to-sales ratio should have considerably declined. What is the background? I'm also curious about your progress on the company's plan. Thank you for the question.
When it comes to the relations between fixed term rental contract transaction volume and our fixed term gross income, yes, the overall growth is 22%, but it doesn't mean that every single tenant is growing by 22%. The tenants that generate transaction volume are growing, but it's not happening to every tenant. There aren't always straightforward relations between transaction volume and gross profits. My point is that our gross profit margin or rent ratio isn't declining. Rather, this is driven by the loss of very high rents, received from tenants of closed stores or a gross profit mix. What worries me a little bit is that in terms of gross profit mix, a store that doesn't sell or an eventful store with some sales coming from retail sales would have a reasonably high gross profit margin.
I think the gross profit margin will drop with stores only doing events that don't sell at all. The flip side of this is that you get a lot of customers, so you can acquire cardholders in the fintech field, pushing down the cost, and you can get customers with good lifetime value. However, I'm concerned that as more and more shops open, that do not sell anything, the gross profit margin will go down rapidly. We are not worried about that at all. In the second half of last year, the income of non-retail stores was 1.1 times higher than that of retail stores. In the first half of this year, the income of non-retail sales was 1.1 times higher than that of retail sales. You don't need to worry about that part. This trend is primarily driven by a gross profit mix.
Yes. Okay, I understand. Thank you very much.
Now I'd like to move on to the next question. Ms. Kanamori from SMBC Nikko Securities, please.
My name is Kanamori from Nikko Securities, and I have two questions regarding fintech. The first question: I think the service income portion, which includes rent guarantee, is a little lower than the full year plan as in the first quarter. I understand that this is due to the timing of negotiations with new business partners, but could you tell us about the status of those negotiations and the further development outlook? Also, I think you mentioned that you're going to strengthen rent guarantees for stores, so please tell us how you're doing against your full year plan, including the progress of these efforts. Thank you.
It is true that when we made our forecast for rent guarantees for this fiscal year, we made a little aggressive plan based on the assumption that the restrictions or movements would be lifted, which is a major change from last year, and that customers relocation make further progress this fiscal year. On the other hand, the number of cards transactions has been doing very well thanks to more people going out, but the number of relocations by affiliated management companies has been lower than expected, and this part of business is slightly slower than the annual forecast. In the area of development, our rent guarantee transaction volume continued to grow at a high rate of about 120% this fiscal year, and we are aware that our transactions are continuing to grow steadily as we develop new business partners and new residential units.
Sales are a little lower than expected because of the slowdown in relocations, as I mentioned earlier. In addition, as for B2B business or rent guarantees for office tenants, we expect to sign about 500 contracts during the current fiscal year, which we estimate will have a boost of about JPY 400 million in terms of sales and income.
Yes. Now I'd like to ask a second question. You have announced a large set of fintech services all at once today. You mentioned digital cards earlier, but I got the impression that the speed of introduction of other services is also increasing rapidly. Is this due to the fact that the external environment for fintech is changing so rapidly that it's necessary to move at this speed? Or are you benefiting from human capital investment at a faster pace than before?
If you have any background on this, please let me know.
Yes, thank you very much. As Ms. Kanamori has just mentioned, we have introduced all three at once, but we have already discussed the introduction of BNPL as an extended feature of EPOS at IR day last December. The specifications and other details were worked out after that, and we are now ready to launch the service in December. As for the EPOS smartphone card, there are companies that have already introduced it, and we were a little behind, but I think we were able to smoothly introduce it after the decision was made.
The main reason for this is that, as I mentioned before, we have a system company called M&C as a group company, so we are able to move quickly in dealing with system in this sense, which is one of the major strengths of our fintech business. I think this is one of the reasons why we were able to introduce the smartphone card so quickly this time. Also regarding owner cards, as I indicated earlier, we will have a trial from now on, and we would like to prepare for next year with various considerations.
Thank you. Considering that the system company has been around for a while, are you intentionally working to launch more and more new services?
In the world of fintech, new technologies are emerging every day, and it is important for us as Marui Group not to simply imitate them, but to consider the significance of doing this business and how we can demonstrate the various features and the strengths of EPOS. We are constantly considering how to launch new businesses in an optimal way by monitoring the overall fintech trends.
Okay, thank you very much.
Thank you. Since there seems to be no one else with questions, we will end the Q&A session. With that, we will conclude the financial results briefing. We'd like to ask all participants to fill out a questionnaire about the presentation. The URL of the questionnaire will be sent to you by email, and we'd appreciate your cooperation. Thank you very much for taking time to attend today.