Boxer Retail reports strong IPO performance with 5.3% earnings growth

Leading grocery discounter Boxer Retail comfortably met its IPO forecasts, increasing headline earnings a share by 5.3% in the 26 weeks ending August 31 after trading firmed in the second quarter.

Net cash surged to R1.1 billion, up from R180 million at the last year-end. The strong trading momentum, solid operational execution, and progress on strategy resulted in an inaugural post-IPO dividend of 45.30 cents per share, representing a 40% payout ratio.

“Boxer accelerated turnover growth, maintained a consistent trading profit margin, and absorbed additional JSE listing-related costs while delivering headline earnings growth and strengthening its balance sheet. In terms of the bottom line, we were probably at the higher end of our guidance,” said CEO Marek Masojada in an interview on Monday.

Turnover increased by 13.9% to R22.5bn, with like-for-like sales rising by 5.3%, significantly outpacing internal selling price inflation of -0.7%. Trading profit also saw a substantial increase of 15.1%, reaching R931m, while the trading profit margin held steady at 4.1%.

During this period, Boxer opened 25 new stores, bringing the total to 547 across South Africa and Eswatini, creating over 2 300 new jobs. Five additional stores were opened after the interim period, with plans for more in the second hal,f to meet a target of 60 new stores, Masojada said.

Trading momentum remained encouraging six weeks into the second half, but full-year outcomes will be influenced by performance during the key Black Friday and festive season trading periods, he added.

“We are still quite small in our market, and there is significant opportunity in geographic expansion. We also see good prospects for adding value to our core business through improved efficiencies, such as better data utilisation. We are witnessing some promising core milestones coming to fruition,” Masojada ssaid.

Boxer’s growth signals both consumer traction and value-driven execution. and strong performances from the existing stores, along with the new openings, contributed to the overall turnover growth of 13.9%, building on momentum from the second half of the 2025 financial year.

The new stores included nine Boxer Superstores, 15 Boxer Liquor stores, and one Boxer Build. Boxer’s share price slipped marginally by 0.6% to R73.53 on Monday morning.

Despite absorbing additional listing costs, Boxer maintained its trading margin at 4.1%, with trading profit up 15.1% to R931m. The company also expanded its supply chain reach this half, commissioning its 7th distribution centre in Tongaat, KwaZulu-Natal, developed in partnership with JT Ross.

Masojada said the distribution centre, which cost R360m to construct, with an additional R80m spent on racking, inventory, vehicles, and computer equipment, positioned the group to be able to open new stores across South Africa’s provinces comfortably, for the next four to five years.

Boxer has also made progress in diversifying its revenue streams. Other trading income rose by 18.4% to R193m, driven by the early monetisation of customer data through its new customer loyalty programme, the Boxer Rewards Club, and strategic alternative income initiatives.

The Boxer Rewards Club has reached 2.3 million members, with increased participation reflected in higher basket sizes and repeat shopping frequency. The launch of a new Supplier Portal, supported by an upgraded Business Intelligence platform, has enabled data-driven supplier collaboration and new income opportunities.

Masojada said they remain on track to meet the group's ambitions for the 2026 financial year. While some pressure on the full-year trading margin was expected compared to the 5.4% margin achieved in the 2025 financial year, the business was confident about its long-term strategic direction, underpinned by operating leverage, further debt reduction, and continued reinvestment into customer pricing and experience.

BUSINESS REPORT