By Lehlohonolo Lehana.
Retailer Boxer, was on Thursday listed on the Johannesburg Stock Exchange (JSE) with the hopes of saving the Pick n Pay group from its financial woes.
Boxer is the biggest JSE listing this year, with an expected valuation of up to R25 billion. In the first listing of 2024 in April, WeBuyCars came to the market at over R8 billion. Another big brand listing was Rainbow Chicken on 1 July, with a market cap of just over R3 billion.
All three of these listings were unbundlings – the latter two out of Transaction Capital and RCL Foods, respectively.
Boxer’s market cap is expected to be bigger than ‘parent’ and debt-laden Pick n Pay, which has a current market cap on the JSE of just over R21.6 billion. However, the Boxer unbundling will likely reduce Pick n Pay’s market value.
The listing allows Boxer to access local and international markets, supporting its plan to double its store footprint and grow its market share. Boxer has roughly 68% of the discount grocery retail market.
Boxer’s high sales density, low-cost operating model, and relatively light asset base allow it to generate high returns on investment. For the 52 weeks ended 25 February 2024, the return on invested capital was 26.5%.
“The value retail sector has the largest number of customers and is the fastest-growing segment, despite limited spending power. We have high brand awareness and preference within this customer segment as our unrelenting focus on unbeatable value, quality, and service resonates with the communities where we trade, “said Boxer CEO Marek Masojada.
“Our deep understanding of our customers and their needs has been the foundation of our highly efficient operating model, which prioritises the investment of cost savings and operational efficiencies into lower prices and deeper value for customers.”
The listing is an incredible milestone for our business, recognising the team’s hard work over the years. We have a very focused strategy, which we have been executing for a number of years now, and we believe we are well-positioned to increase our penetration in the market in the coming years.”
Pick n Pay CEO Sean Summers highlighted the achievements of the discount retailer to date.
“I feel an extraordinary sense of pride in what they have grown to become. We saw the potential in Boxer over 22 years ago when we first bought the company, and I have no doubt it will grow as a formidable contender in the retail sector. It’s come full circle,” said Summers.
The Boxer listing also completes Pick n Pay’s two-step Recapitalisation Plan, significantly boosting its balance sheet.