by Jalpa Bhoolia
Listing on the JSE in November
Boxer was founded in 1977 in KwaZulu-Natal's Empangeni community. The brand has since grown far and wide and includes well-defined retail offerings that boasts stores in every province of South Africa, as well as in the Kingdom of Eswatini.
Retail giant, Pick n Pay, acquired Boxer in 2002 to best serve the consumer marketplace that Boxer dominates in. Through Boxer's impressive growth over the decades, it now boasts an array of formats, ranging from full-service discount supermarkets, to an "everything under one roof" builders hardware offering, and liquor stores.
Earlier this year, parent company, Pick n Pay, announced that it will list Boxer separately on the Johannesburg Stock Exchange (JSE) with a secondary listing on the A2X. The significant development follows on from Pick n Pay's recapitalisation plan to stabilise its balance sheet and restore investor confidence. The new era sets Boxer up to spread its wings and forge its own path.
As of August 2024, Boxer had 300 Superstores, 159 Boxer Liquors and 30 Boxer Build stores across South Africa and Eswatini, with a total of 489 stores.
Boxer Superstores
Boxer Superstores is a discount supermarket providing a range of products that shoppers need in their day-to-day lives from a variety of low-priced products - including popular brands - through to convenient services. It boasts in-store departments which include a full-service bakery, butchery, hot foods delicatessen, a fruit & vegetable zone and the ever-popular Money Kiosk counter.
Boxer Liquors
Boxer Liquor Stores are located alongside existing Boxer Superstores, making it easier to shop for all grocery needs in one convenient location. Liquor Stores stock a range of alcoholic beverages and products including beer, malt, cider, cordials, spirits, cigarettes, tobacco, ice, and snacks.
Boxer Build
Boxer Build stores stock a wide range of competitively priced hardware and building materials for the DIY market, the home builder and the commercial builder. In addition to products, it offers support from staff who are trained to provide building advice and support to the commercial and private builder and renovator. The group also offers a Boxer Cash Club Savings and credit facility for shoppers where they can deposit monthly amounts accumulating a total which will ultimately be used for their building requirements.
Management
Boxer is headed by Chief Executive Officer (CEO), Marek Masojada, who has been with the group for 31 years. He joined Boxer when it was a five-store regional business and is currently tenured in his sixth year as CEO. He previously served 25 years as CFO, with deep involvement in Strategy, Finance, IT, Property and Expansion, Value Added Services and Legal.
David Wayne is the Chief Financial Officer (CFO), also currently tenured in his sixth year as CFO. He joined when Boxer had 68 Stores, following roles in auditing at Ernst & Young. In the previous 11 years of his career, he has held the role of Group Financial Manager and Systems Accountant.
Sector considerations and competitive landscape
A report by 6Wresearch suggests that the South African Food and Grocery Retail Market size is expected to grow at a compound annual growth rate (CAGR) of 5.3% during the forecast period 2024 to 2030.
According to the Futureworld South African Discount Retail research report obtained by the group, Boxer is a dominant market player in the discount grocery market (68.2% market share) and holds a 4.2% market share in the total formal grocery market. Boxer strives to compete within the existing formal market through conversion and collaboration with the informal market.
The group is ambitious and has a solid pipeline in place to drive momentum. According to the recent overview pack released by Boxer, it plans to open 25 to 35 Boxer Superstores and 35 to 40 Boxer Liquors annually, and to double its store footprint in the next six to seven years.
In the presentation, the company notes that South Africa is still underpenetrated in discount grocery relative to other markets - providing ample room for growth, supported by higher absolute grant payments and population growth.
While population growth (particularly the middle class), private label expansion and technological advancements are supportive of upside potential, the local grocery retail market is not short of challenges. Economic instability, strained consumer disposable income, supply-chain interruptions and regulatory controls can serve as major detractors.
Financials
Some of the highlights from the recently released Boxer presentation include:
Investment case summary
Risks
Valuation - a knockout deal?
We will provide a more comprehensive note, precise valuation, and the offer price range shortly after the pre-listing statement is published.
How to apply
The Boxer private placement is not open yet, but FNB will be accepting binding expressions of interest prior to and throughout the offer period.
Please note that the minimum application amount is R10 000 in increments of R1 000 thereafter.
FNB Stockbroking and Portfolio Management (SPM) - Log onto the FNB SPM website ( shares.fnb.co.za). Navigate to My Portfolio>Corporate Actions.
FNB Share Investing (SI) - Send an email to shareinvesting@fnb.co.za. Please indicate your account number and the rand amount you would like to invest. Please be advised this is only available as a Share Investor product.
Please ensure funds are available. If your account is not funded the application will be cancelled.
Please note that we expect the offer to be oversubscribed. This means that you may not receive the full number of shares you have applied for. Allocations will be made on a proportional basis. You will only pay for the shares you receive.
If you do not have a Local Trader or Share Investor account, you can open an account on the FNB App or via FNB Online Banking:
FNB App: Navigate to 'Invest' tab > Select 'Share Portfolio' > Select 'Add'/'Open a Share Portfolio account' > Select 'Invest in Shares & Gold' > Select 'Share Investor' or 'Local Trader' > Select 'Apply now' > Complete the steps and accept the Ts and Cs.
FNB Online Banking: Click 'Menu' > Click 'Invest tab' > Click 'Investment Detail' > Click 'Open a Share Portfolio Account' > Click on 'Share Investor' or 'Local Trader' tab and complete the account opening process.
Please note: For the Local Trader option on Online Banking, you will be redirected to the the FNB Stockbroking and Portfolio Management website to complete your Local Trader application. You will be logged out of FNB Online Banking and logged into FNB Stockbroking and Portfolio Management website. Click 'yes' to continue to complete the application process.
