Pick n Pay targets upper-end IPO size for Boxer Chain

South African retailer Pick n Pay (PIKJ.J) announced on Monday that the base size of its initial public offering (IPO) for its discount grocery chain Boxer would be set toward the higher end of its guidance as it prepares for its listing in Johannesburg.

Pick n Pay targets upper-end IPO size for Boxer Chain

Pick n Pay indicated that the IPO proceeds could range between 6 billion rand and 8 billion rand ($339 million and $452 million). In a statement, the retailer noted that the Boxer IPO will feature an overallotment option, which is expected to be capped at 500 million rand and will be settled through the issuance of new shares. This option allows underwriters to sell more shares than initially planned if demand exceeds expectations, stabilizing prices. The IPO is part of Pick n Pay's two-step recapitalization strategy to raise much-needed cash to reduce debt and revitalize its underperforming core supermarket business. The company also seeks to ensure that Boxer is valued appropriately in light of its "superior" growth prospects and return on invested capital. Group Chief Financial Officer Lerena Olivier informed investors that the Boxer business has secured unsecured committed term debt and working capital facilities following the IPO.

Boxer projects 10%-12% turnover growth, aiming to double revenue in five years

Boxer anticipates gross drawn-term debt of up to 850 million rands and approximately 2 billion rands in working capital facilities. Pick n Pay will maintain a controlling stake in Boxer. For the financial year 2025, Boxer projects turnover growth of around 10%-12%, with mid-teens growth expected over the next three to five years, aiming to double its turnover within five years. For the 26 weeks ending August 25, Boxer reported a 12% increase in turnover to 19.8 billion rand, while its trading profit rose by 11.8% to 809 million rand.