London-listed companies are full of surprises such as online firms owning physical stores and retailers having hotels
Thursday 26 Sep 2019 Author: Daniel Coatsworth

Investors typically get to know companies well if they follow their story through trading updates and financial results. That doesn’t always give you the full picture.

Several quoted businesses have unusual assets which aren’t front and centre of the investment case. There is often logic behind these quirky assets and you may be interested to read about a few examples.

We’ve spotted a number of companies that fit the bill and would love to hear from readers who can offer any more examples – please email with your insights.


If you’ve ever wondered where sausages come from and how they get onto the supermarket shelf, then it might surprise you to learn that Bradford-based supermarket chain WM Morrison Supermarkets (MRW) is the only large UK retailer to have its own abattoir.

At age 17, Jack Woodhead found himself in charge of a butchers shop near Bradford when his father fell ill. He then built up a business which supplied Ken Morrison’s first supermarket and subsequently becoming one of Britain’s biggest meat suppliers.

In 1991 the business became a subsidiary of Morrisons and its first vertically integrated supplier. Today the company slaughters over 200,000 cattle a year, more than 700,000 lambs and well over one million pigs at its three abattoirs.

Not only does this provide a cost advantage to the company, it also provides provenance and total control over the supply chain, ensuring high quality standards.


Investors may presume that companies classified as online retailers only operate via the internet. There are two examples where this is not the case.

Gear4music (G4M:AIM) sells musical instruments and music equipment via its website. Yet this is not pure-play online business. It also operates from brick and mortar showrooms in York (where it is headquartered), Sweden and Germany.

Physical showrooms are a contractual requirement of the vast majority of the industry’s suppliers. Besides its own-brand instruments, Gear4music sells premium third-party brands such as Fender, Yamaha and Roland.

Gear4music’s European showrooms are required to open up buying opportunities in Europe. Yet it is important to stress that the company’s York showroom also makes a healthy positive contribution to the profit and loss account.

Physical showrooms are also a good way for Gear4music’s staff to touch, feel and play around with some of the products whose benefits they are expected to extol to customers and they are also useful for training and tech support sessions.

Showrooms are also an invaluable method of gathering ‘offline’ customer feedback, particularly from regular customers, while presentation of instruments and equipment to a high standard builds further credibility with brands and suppliers.


The second online company with a surprise physical shop is electrical retailer AO World (AO.).

It joined the stock market in 2014 with fanfare aplenty, outlining a bold ambition to disrupt the UK white goods market with a key focus on customer service. In addition to its core online business is something called ‘AO Outlet’, a brick and mortar shop located in Telford.

The strategic rationale behind running a physical store is rather compelling, because AO Outlet is actually attached to AO World’s enormous recycling facility – in fact this is the biggest fridge recycling plant in the country. The Telford store sells professionally refurbished and end-of-line goods direct to the public.


Quintessential British fashion brand Laura Ashley (ALY) is going through a bit of a rough patch, with its home furnishings in particular going out of vogue with customers.

But one area where it does see potential is in hospitality. Despite few people knowing that Laura Ashley is involved in this sector, the company actually has nine licensed tea rooms and two licensed Laura Ashley hotels in the UK, and plans to expand this further.

Situated typically in bourgeois hotels and the like, Laura Ashley believes its tea room concept can take off and become a key part of total group revenue going forward. It also plans to expand this concept internationally.

Also embracing the hospitality sector is Hotel Chocolat (HOTC:AIM), a chocolate seller who lives up to its name by having a hotel, based in the Caribbean.

The only bean-to-bar chocolate manufacturer in the UK, Hotel Chocolat has its own cocoa plantation on the Rabot Estate in St Lucia. And given its idyllic surroundings, the company sought an opportunity to live up to its name and build a real hotel on site, named Boucan.

The firm doesn’t talk about the hotel in its financial results, but in documents accompanying its admission to the stock market in 2016 Hotel Chocolat said the hotel – which has 14 rooms, a spa and a luxury restaurant – made $2.5m sales and $400,000 earnings before interest, tax, depreciation and amortisation (EBITDA) in its 2015 financial year, with 80% room occupancy.

Travis Perkins: A fashion icon?

Did you know builders’ merchant Travis Perkins (TPK) used to have a workwear fashion brand up until 2018? It sold clothes under the Scruffs brand, principally to tradesmen. Scruffs sat under the Birchwood Tools subsidiary which was offloaded to rival firm Toolstream last year.

Workwear clothes now have mainstream appeal thanks, in part, to the popularity of US brands Carhartt and Dickies. Skateboarders and musicians are among the big fans of these clothes which tend to last longer than your average outdoor apparel.

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