Boxer hangover

Capicraft founder and CEO Drikus Combrinck said Boxer is experiencing a typical post-initial public offering (IPO) hangover, which is why the stock has been flat since listing.

The Boxer IPO formed part of Pick n Pay CEO Sean Summers’ turnaround plan to recapitalise the retailer and stem years of market-share declines.

Boxer’s IPO closed on 22 November, with 157.4 million shares allocated to qualifying investors at a price of R54 each.

The company was listed on the Main Board of the JSE on 28 November 2024. It was an instant hit.

The Boxer share price jumped to R63.51 on the first day of trading and increased to R67.00 per share the next day.

However, since then, Boxer has been trading in a narrow range between R63 and R69 per share. The current share price of R63.13 is lower than on its first trading day.

It raises the question of whether Boxer is a good investment with growth prospects or whether it has had its run.

Combrinck told Business Day TV that the retailer is experiencing a typical post-IPO ‘hangover’.

“There is always a lot of hype around an IPO, especially for a big one like Boxer, which is a growth company,” he said.

New listings are scarce on the JSE, and the market overpaid for the share, which is why there has not been much movement since November 2024.

Combrinck said Boxer, as a growth company, should grow into its inflated valuation over the new year or two. He said he would hold on to the share as an investor.

Grant Nader from Benguela Global Fund Managers said Boxer is a great business with good growth prospects.

“Many people did not get their full allocation during the IPO and want to get more Boxer shares,” he said.

This means many investors will buy Boxer shares if the price falls further towards its IPO price.

“It is a long-term hold. If the company’s share price declined by another 10%, it is a good opportunity to buy more shares,” he said.

A chart of the Boxer share price since the listing in November 2024 can be seen below.

Boxer trading update

On 4 February 2025, Boxer presented a trading update about its performance for the 45 weeks to 5 January 2025.

Sales for the reporting period grew 11.4% and 6.7% like-for-like, while sales for the 19 weeks to 5 January 2025 grew 10.8% and 5.5% like-for-like.

It explained that internal food inflation was 6.1%, higher than the 5.3% for the first half of the current financial year.

Boxer’s reported internal inflation is based on the year-on-year change in average unit prices for items common to both periods.

The average unit price is calculated as total like-for-like sales divided by total related product volumes.

The softening in sales momentum versus the first half of the financial was the result of the business coming off a significantly stronger base.

Boxer said it was on track to meet its 2025 financial year guidance on Superstore rollout, including Pick n Pay conversions.

Liquor store openings have been impacted by delays in the granting of liquor licences for several of the planned stores.

Boxer is pushing to finalise the outstanding licences before financial year end, but the outcome is not fully within management’s control.