BizNews Briefing: SA’s most exciting new listing in years; Elon Musk and the White House
In this episode of the BizNews Briefing, which is now aired live at 6pm every night, host Alec Hogg talks to top SA retail investor 36ONE's Evan Walker about his lunchtime meeting with the team at Boxer, the spinoff from Pick n Pay which will list on 28 November and "should be in everyone's portfolio". Also, in this programme, a visual insight into Elon Musk's ascension into a powerful White House role.
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Summarized transcript of the Briefing:
Introduction
Alec Hogg (00:17.456)
Good evening. I'm Alec Hogg from BizNews. Tonight, we'll discuss the biggest upcoming listing on the Johannesburg Stock Exchange (JSE): Boxer, a spin-off from Pick n Pay, with insights from Evan Walker, a seasoned retail analyst.
Market Overview
Alec Hogg (01:15.397)
The JSE saw mixed results today. The resources sector dropped by 3.5%, with the Rand weakening against the US dollar to 18.08. Bitcoin declined slightly, trading under $87,000, but remains volatile after surpassing $90,000 recently. Top performers included BIDCorp, which rose by 6%, and Telkom, up by 2.3%. Conversely, resource-heavy stocks like Goldfields, AngloGold Ashanti, and Anglo-American PLC suffered losses.
Alec Hogg (03:39.173)
The S&P 500 is slightly down, while MicroStrategy continues to surge, driven by its Bitcoin investments. Tesla, after a strong run, saw a 2.5% dip today.
Interview with Evan Walker on Boxer's Upcoming Listing
Alec Hogg (04:50.842)
Evan Walker from 36One provides insights into Boxer's business and its upcoming listing.
Evan Walker (04:50.842)
Boxer, founded in 1977, was acquired by Pick n Pay in 2002. It's a successful discount retailer focused on rural areas, especially in KwaZulu-Natal and Mpumalanga. The company plans to expand by adding 30-40 new stores annually, with additional liquor outlets.
Boxer maintains a lean business model with competitive pricing, targeting lower-income consumers. The upcoming listing, valued at around R25-26 billion, is expected to provide significant growth, with projected annual growth rates of 10-15% over the next three years.
Alec Hogg (06:30.351)
Why is Pick n Pay spinning off Boxer?
Evan Walker (06:37.374)
Pick n Pay faces challenges, including R8 billion in debt and underperforming stores. The spin-off is part of a strategy to stabilize Pick n Pay's finances, following a R4 billion rights issue earlier this year. This move will help Pick n Pay rebuild its balance sheet and focus on its core brand.
Boxer's Resilience and Growth Strategy
Alec Hogg (07:47.865)
Despite Pick n Pay's issues, Boxer has remained strong. How did it avoid Pick n Pay's mismanagement?
Evan Walker (08:21.240)
Boxer stuck to a straightforward retail philosophy: focusing on essential items, bulk buying, and maintaining low costs. Its efficient operations have allowed it to penetrate the informal and rural markets successfully. Recently, Boxer launched a loyalty program and offers various financial services, such as instant bank account openings and cash withdrawals, enhancing its competitiveness.
Alec Hogg (11:28.087)
Would Boxer be a good investment for long-term portfolios?
Evan Walker (11:56.818)
Yes, Boxer has strong fundamentals, including plans for quick debt reduction and steady dividends. However, due to high initial demand, it might be wise for investors to wait until the initial frenzy subsides before buying in. The listing is scheduled for November 28, with significant interest from institutional investors.
Special Feature: Elon Musk's Role in the White House
Alec Hogg (13:50.029)
A special feature by the Financial Times examines Elon Musk's influence on US politics, especially his relationship with Donald Trump. This partnership could have significant implications, with Musk taking on a more prominent role.
Update on Banxso Scandal
Alec Hogg (18:40.421)
There are new developments in the Banxso scandal involving fraudulent advertisements using celebrities like Elon Musk to lure investors. Despite losing its license, Banxso allegedly continued operations, prompting legal actions to prevent the company from disposing of assets. The South African Revenue Service (SARS) has issued a preservation order to safeguard clients' funds.
Climate Change Conference in Baku
Alec Hogg (24:08.446)
A climate change conference is currently taking place in Baku, Azerbaijan, with South Africa's strong delegation in attendance. The conference focuses on concerns about Donald Trump's potential return to the White House, especially regarding climate policies. Ajay Banga, President of the World Bank, shared his perspectives on the future of climate initiatives.
Company Earnings Highlights
Alec Hogg (24:08.446)
- MultiChoice: Revenue down 11%, with operating profits plunging by 49%. Losses increased from R1.3 billion to R1.8 billion. The company is investing heavily in Showmax to compete with global streaming platforms.
- Premier Foods: Strong interim results, with headline earnings per share rising from 330 to 483 cents. Despite promising results, the share price fell slightly.
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