Questor: This little Scottish builder seems to have a solid foundation. Buy

Due to its geographical location, Springfield is particularly interesting for three reasons. First, Scottish house prices are car prices. The latest Halifax survey (for the previous month) shows that prices have risen 9.7 percent year-on-year. However, the average selling price is £ 192,988, well below the UK average of £ 276,091. That is why it should be compensated a little.

This could help Springfield create good margins on its land bank with 15,281 plots (up from last year’s 973 completed works) focused on villages and development away from major cities.

Second, the Scottish house purchase regime gives greater visibility to completion and sale, as the buyer enters into a purchase agreement much earlier, so cancellations should be less frequent than in the rest of the UK.

Finally, private equity group Apollo has just bought another, larger Scottish builder, Miller Homes. Miller operates in both England and Scotland, so the parallel is not accurate, while the financial details of the transaction were sparse, but the rush shows that Springfield is operating in the right industry at the right time.

That’s all nice and right, but investors aren’t paid to recognize or tell good stories. They count the value paid to access this narrative and the profits and cash flow that flow from it. The projected price-to-earnings ratio of less than 10 is a good start here, as is the forecast return of almost 4%, based on unanimous analysts’ forecasts, for dividends, which appear to be around 2.5%. times covered by profits per share.