Retailer Pick n Pay announced on Monday that its discount grocery division, Boxer, will proceed with a long-anticipated public listing on the JSE and the A2X by the end of the year.
This move, aimed at generating between R6 billion and R8bn, is part of Pick n Pay’s broader financial restructuring and turnaround strategy as it works to stabilise its core business and boost long-term shareholder value.
Boxer, one of South Africa’s most prominent discount grocery chains, will become a standalone subsidiary under the name Boxer Retail Limited following an intra-group restructuring. As part of the initial public offering (IPO), newly issued shares will be offered to selected investors, with an additional overallotment option of up to R0.5bn, which could raise funds at the upper end of Pick n Pay's guidance.
Pick n Pay said, “Boxer has cemented its position as South Africa’s leading soft discounter, consistently growing its sales volumes through a deep understanding of its customers and an unwavering commitment to reinvesting cost savings into lower prices.”
It further said, “Boxer’s remarkable performance continues to prove it is an exceptional business, and we are excited to see it thrive as a listed entity.”
The retailer added that the IPO would be an “important milestone that will position Boxer among South Africa’s leading retailers”.
The IPO’s success could play a pivotal role in boosting Pick n Pay’s liquidity and improving its capital structure as the company navigates a financially turbulent year.
Financial results
The financial results for the 26 weeks ended August 25, 2024 paint a mixed picture. Pick n Pay’s consolidated turnover rose by a modest 3.7% to R56.1bn. However, the group’s loss before tax surged by 19.6% to just more than R1bn, and the loss after tax widened by 44.8% to R827.4 million. Basic earnings per share also fell by nearly 40%.
Despite these figures, Boxer continued to shine, reporting a 16% increase in trading profit, reaching R801.4m, with a 12% rise in sales. Pick n Pay said the chain’s success has been attributed to efficient cost management, a streamlined product offering, and a keen understanding of customer needs in the lower-income market.
Boxer’s IPO aims to solidify its market position and Pick n Pay plans to retain a controlling interest in the chain.
Strategic transformation at Pick n Pay
During the first half of 2025, Pick n Pay undertook a comprehensive strategic shift designed to address structural inefficiencies and drive profitability. With a recently refreshed management team, the company has prioritised optimising its supermarket segment and reinvigorating divisions like Pick n Pay Clothing, which posted a notable 9.8% sales increase, and Pick n Pay Online, which grew by an impressive 60.6% year-on-year.
The company’s rights offer in the first half of financial year 2025 was oversubscribed by 106%, raising R4bn in new capital. This capital injection, part of a two-step recapitalisation plan, was crucial in alleviating some of the pressures on Pick n Pay’s balance sheet, setting the stage for Boxer’s IPO and providing the group with much-needed liquidity.
CEO Sean Summers praised the leadership team's role in executing the turnaround plan, saying, “Their unflinching fortitude and support in the face of all odds has built a team of people... that face the road ahead with confidence and vigour.”
The Road ahead: Challenges and recovery targets
Summers said the company's recent financial challenges were expected, highlighting that the “results are in line with our business plan,” with Pick n Pay expecting second half earnings to be buoyed by seasonal sales during Black Friday and the festive period. The group projects a meaningful improvement over full year 2024, with Boxer’s profitability playing a critical role.
While the company-owned supermarkets are showing signs of recovery—posting a 3.1% increase in like-for-like sales, compared to a 0.5% decline in the second half of financial year 2024—the franchise division has faced headwinds, which Pick n Pay is working to address. The strategic focus is now on driving profitability and maintaining momentum in the Boxer and Clothing segments.
Summers said, “Unlike 12 months ago, I can confidently say that the worst is behind us,” though he acknowledged that the path to profitability remains fraught with challenges.
Furthermore, he gave a hint more was on the cards.
“On Wednesday, we will also announce a strategic partnership that will be a game changer for our business and customers alike, showing further confidence and traction in our journey to restoring Pick n Pay to its rightful place,” he added.
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