Boxer’s performance accelerates (JSE: BOX)

And of course, the market liked it

Boxer released a trading update for the 17 weeks to 29 June 2025. A lot rides on it, not least of all for Pick n Pay (JSE: PIK) that still has a majority stake. There have been times recently when the implied value of Pick n Pay itself (calculated by removing the look-through value of the Boxer stake from the Pick n Pay market cap) has been negative. This tells you a lot about the cash generation characteristics of the two groups.

Boxer is regarded as a great business, with a business model that has done a solid job of giving Shoprite a serious headache in the lower income grocery segment. The latest trading update reflects growth of 12.1% overall and 3.9% on a like-for-like basis, which is stronger than what we saw from Boxer in the second half of FY25 (9.0% and 3.7% respectively).

With negative food inflation of -0.6%, this is a solid outcome. It’s much harder to grow revenue when inflation is negative. Boxer has changed the way they calculate inflation and has given useful historic data, with inflation for FY22 to FY24 of 4.2%, 10.1% and 3.1%. In other words, there’s finally some relief for consumers. Let’s hope my freshly bought stake in Mr Price benefits as a result!

The goal for FY26 is low-teens growth vs. FY25 on a 52-week basis. They are also on track for FY26 store rollouts. As you can see from the gap between like-for-like sales and total sales, the rollouts are critical. Perhaps most importantly, they believe that gross margin goals can be reached despite the low inflation environment, which would be genuinely impressive.

The share price closed 4.6% higher on the day. It’s worth noting that Pick n Pay was 5.4% higher on the day and that other grocery names also finished slightly in the green.

Greencoat could do with more wind (JSE: GCT)

Especially because of the negative impact on asset valuations

Greencoat Renewables is a recent addition to the JSE. It takes a while for decent trading volumes to start to coming through, as more South African investors consider getting themselves onto the share register. Volumes are light at the moment, but they are there.

The timing of the listing seems a bit unfortunate based on the latest results though, as the quarter ended June 2025 saw the group struggle with disappointing wind speeds in Europe (16.1% below budget). This is the trouble with renewable energy unfortunately: it depends on Mother Nature, and she doesn’t always cooperate.

Despite this, they still managed 1.1x gross dividend cover in the second quarter in terms of cash generation, so they didn’t go backwards from a cash perspective. They were just way down on the first quarter, as evidenced by dividend cover for the first half of the year being 1.8x (despite the tough Q2).

They managed to offload a portfolio of six Irish assets at a 4% premium to the last reported NAV, so that’s a helpful value unlock that will be used to repay debt. Asset recycling is key in any property business, as it gives the market some comfort that the NAV is real.

This doesn’t stop the fund trading at a discount to NAV though, with the management fee changed to a calculation based on 50% NAV and 50% the lower of NAV and market cap. This drove an 11% drop in the management fee, so that tells you something about the discount to NAV.

Speaking of the NAV, it fell 4% for the quarter, with the biggest culprit being the impact of negative portfolio valuations. These valuations are based on the expected power generation, so there’s a lot of fancy modelling around the weather and other issues that takes place. It is, of course, even more of a guessing game than modelling cash flows from tenants (like property funds) or sales of goods and services.

Renewable energy is unfortunately a volatile source of power, no matter how much we wish that the whole world could run on wind.

Almost perfectly flat earnings at Kumba Iron Ore (JSE: KIO)

The same can’t be said for the dividend

Kumba Iron Ore released interim results for the six months to June 2025. When I say flat earnings, I really mean it – HEPS was 22.26 cents vs. 22.27 cents in the comparable period! But the interim dividend came in 12% lower, so there’s been a sharp drop in the payout ratio.

The earnings performance is impressive in the context of the broader operating conditions. Revenue fell by 4% despite total sales being 3% higher, so the iron ore market isn’t being kind to Kumba. This earnings result is firmly a self-help strategy, with only modest increases in costs at Sishen and a substantial drop in costs at Kolomela. To give some perspective, attributable free cash flow was R7.9 billion and cost savings were R661 million!

Even with the pressure on iron ore prices, Kumba remains a highly lucrative business with return on capital employed (ROCE) of 48% and EBITDA margin of 46%.

The lower dividend payout ratio is a sign of conservatism from the management team. The drop in share price of 20% in the past 12 months despite flat earnings is a sign of realism from the market around the near-term outlook for iron ore prices, as mining sector share prices are even more forward-looking than in other sectors, as the key commodity prices are easily observable on the market and can be modelled accordingly by analysts and investors. This is exactly why you should be very careful using trailing dividend yields as a valuation metric in the sector – in cyclical businesses, last year’s dividend is no indication at all of what next year’s dividend might be.

Shaftesbury is loving life in London’s West End (JSE: SHC)

What’s that old story about location, location, location?

Shaftesbury has released results for the six months to June. Their recent leasing transactions tell a story of strong demand, with rent being 9% ahead of December ERV and 16.3% ahead of previous passing rents. Along with positive trends in footfall and customer sales, this has all come together to help Shaftesbury achieve 16% growth in underlying earnings to 2.2 pence per share. The interim dividend is 12% higher at 1.9 pence per share.

Property valuations are an important part of the story of course, particularly as the broader European property market has been struggling with valuation yields. The good news for Shaftesbury is that yields have stabilised, which means that like-for-like increases in earnings led to a 3.1% increase in the portfolio valuation. The net tangible asset value is thus 3.3% higher.

It’s been a strong period for the group, in which they also locked in the long-term partnership with Norges Bank Investment Management for the Covent Garden estate.

The share price is up 9% in the past year on the JSE, helped along by a modest weakening of the rand against the pound.

Nibbles:

• Director dealings:
  • Santova (JSE: SNV) has been fascinating to follow. After announcing the deal to acquire Seabourne and following it up with director buying in May / June, we saw a strong rally in the share price and then significant selling by directors. Here’s yet more selling, with an executive director selling shares worth R8.3 million.
  • Two directors of Renergen (JSE: REN) – including the CEO – sold shares worth R6.5 million in on-market transactions.
  • A director of a major subsidiary of PBT Group (JSE: PBG) bought shares worth R1 million.
  • An associate of the spouse of the CEO of Huge Group (JSE: HUG) bought shares worth R475k.
  • Here’s another example of the CEO of Vunani (JSE: VUN) mopping up the limited liquidity in the market, with a purchase of shares for R2.5k.

• Naspers (JSE: NPN) / Prosus (JSE: PRX) announced that the offer to shareholders of Just Eat Takeaway has been extended to 1 October 2025. This is to allow time for the European Commission to give its decision on the transaction and for shareholders to then decide whether to accept the offer or not.

• Copper 360 (JSE: CPR) is trading under cautionary regarding the “introduction” of additional equity capital. Like so many junior mining houses, regular capital raising is part of the story. Copper 360 is struggling though, with the share price down more than 40% this year and showing no signs of slowing down.

• Altvest (JSE: ALV – and a few preference share codes as well) announced the appointment of Jonathan Phillips as executive financial director of the group.