Business

Pick n Pay’s big draw for investors

Luke Fraser

 ·2 Oct 2025

Pick n Pay is undergoing a significant change, with investors drawn to its stocks as a cheap entry into Boxer and other improving businesses. 

The Pick n Pay Group faced a tough start to the decade, characterised by billions in losses, being technically insolvent, and question marks over its leadership. 

However, the group saw the return of former CEO Sean Summers in late 2023, who quickly started work on turning the group around. 

This included a two-step recapitalisation plan, including a R4 billion rights offer and the initial public offering of Boxer for R8 billion, which was its best performer. 

The listing of Boxer was one of the largest on the JSE for years, with the company’s market cap currently sitting at R31 billion. 

This is far higher than Pick n Pay’s market cap that is just shy of R19 billion.

Considering that Pick n Pay still maintains a 65% shareholding in Boxer, its share price actually offers a discount to its R21 billion stake in Boxer. 

The operational and structural changes from the Pick n Pay group are also getting the approval of investors, with many drawn to the company’s stock. 

Speaking to Business Day TV, Rowan Williams from Nitrogen Fund Managers chose Pick n Pay as his stock pick, mainly as it offers a discounted entry into Boxer. 

Williams said that Pick n Pay has become a bit of a trading stock. A recent decline in food price inflation expectations led to a slight drop in the share price of the group.

However, he noted that the medium-term prospects for the Boxer remain particularly good, which is the bulk of the value of Pick n Pay. 

He added that there is also a potential upside from the problem Pick n Pay operations across South Africa. 

This includes renovating or closing certain Pick n Pay stores, with many converted into Boxer stores. This will create a smaller, more profitable business alongside giving easy access to Boxer. 

Boxer’s strange update

Williams’ comments came shortly before Boxer released a trading update for the six months ended 31 August 2025. 

Boxer saw several metrics heading in the right direction, with turnover increasing by 13.9%, while like-for-like sales jumped 5.3%.  

The group’s headline earnings also increased by up to 9% to a range between 492 and 539 cents per share. 

“The improvement in headline earnings is driven by a strong trading result, which was able to partially offset the previously guided incremental costs associated with being a listed entity,” said Boxer.

However, the group still expects a decline in its earnings per share (EPS) and headline earnings per share (HEPS) due to its IPO structure. 

Due to the IPO, Boxer’s weighted average number of ordinary shares in issue, net of treasury shares, increased by 51.1% from a restated 299.999 million for H1 FY25 to 453.290 million for H1 FY26.

EPS are thus expected to drop by between 30% and 36% to a range between 105.21 and 115.18 cents per share. 

HEPS are expected to drop by between 28% and 34%, to a range between 108.57 and 118.85 cents per share. 

Further details will be given in Boxer’s official interim results, which are set to be released on Monday, 13 October 2025.