Corporate action at small packaging group Bowler Metcalf (Bowcalf)? That would be surprising for a company that has issued more dividend notices in the past five years than cautionary announcements during its 38-year tenure on the JSE.
Bowcalf is well known for its singular focus on specialist plastics packaging, a business model it has adapted to survive the constant challenges and pressures in the sector. That it has thrived is thanks mainly to a resilience that comes from its family ownership and engineering prowess.
Listed on the JSE in 1987 at an equivalent of 14c, Bowcalf evolved from the rescue of the original business from liquidation by packaging sector veteran Horst Sass.
Initially known for its manufacture of plastic bottle caps, the Ottery-based company today manufactures some of the most complex colour-printed packaging on display in retail aisles. More importantly for faithful shareholders, Bowcalf trades at R15 with a solid pedigree of earnings growth and dividend payments over almost four decades.
The South African packaging industry is dominated by large entities such as Mpact and Nampak. But there are many smaller companies both listed and private such as Polyoak Packaging, Transpaco and Bowcalf that hold profitable niches. With a market cap of R1bn, tight liquidity and little institutional interest, Bowcalf has remained below the radar for many investors.
Under the leadership of CEO Friedel Sass, son of Horst, the original prime mover, Bowcalf has adapted well to the post-pandemic environment — especially the changes in the consumer packaging and consumer products landscape in South Africa and on the continent.
African consumers, particularly those in the lower-income groups, now tend to seek value and authenticity in their products, especially in personal care. As a result, multinationals are being challenged in brand dominance. Global leaders such as SC Johnson, Johnson & Johnson, Unilever and Reckitt Benckiser have seen their power brands become less relevant to this consumer demographic.
Bowcalf realised its revenues from the large global brand holders were falling and responded by developing close partnerships with new fast-moving consumer goods customers that have generated an improved sales pipeline in this market.
A notable customer is Satiskin, owned by the Amka Group, a South African health and beauty company that manufactures and distributes personal care products. This multibillion-rand business has become a material client of Bowcalf and the relationship has generated a significantly improved sales pipeline on the back of new market opportunities.
Perhaps Sabvest Capital or even Novus Holdings might line up for Bowcalf
In its year-end results to June, Bowcalf reported a 10% rise in revenue to R946m and a 14% increase in profits to R122m.
Bowcalf, as a family-owned and -managed business, has always run a conservative balance sheet. It has a good track record of delivering against strategy and a history of strong cash generation. The company ended financial 2025 with R311m in cash and cash equivalents and a directors’ valuation of R212m. This provides a solid underpin to the last stated NAV of R11.72 a share.
At the recent AGM, Sass indicated there were record revenues at the start of the new financial period. It seems likely that revenue will top R1bn in the next year, remembering that Bowcalf has committed to a hefty investment in new manufacturing and warehousing facilities in Joburg for between R200m and R250m. That’s a sizeable commitment for a small packaging company and underlines management’s confidence in growth and new customer partnership opportunities.
While a good year might lie ahead for Bowcalf, the board has argued that being listed is more trouble than it’s worth. Cash-flush Bowcalf has no need to issue equity, even in the medium term. The board stressed that the listing is not an obstacle. But these references led to another pointed comment: it’s significant that the board said it is ready to consider an external party as a significant minority shareholder. This could entail the shareholder — perhaps after securing an initial 10% or 20% stake — being involved in the management of Bowcalf.
Sass’s tenure is nearing its end. Bowcalf has instigated the appointment of internal candidates who will become COOs, one eventually succeeding Sass as CEO.
With treasury shares in hand, Bowcalf could elegantly integrate an investor who wishes to partner with the family to grow the company for the next decade. A cultural and engineering-savvy fit may be what Bowcalf seeks, seeing as it has no real need for money.
Perhaps Sabvest Capital, known for its successful stakes in family groupings, or even Novus Holdings, which has printing and packaging interests, might line up for Bowcalf. The company is clearly embarking on its next growth phase and such a suitor may speed up its aims.
Bowcalf may not be the hare of the packaging sector and more like the considered tortoise, but we all know who won the race. The talk of major expansion, record revenues, new opportunities and, tantalisingly, a new influential shareholder may just strap a turbocharger on the tortoise.
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