In recovery

The housing sector’s steady recovery suggests that Springfield Properties (LSE:SPR) may be an attractive dividend share to think about. Helped by recent interest rate cuts and a mortgage market price war, buyer affordability is steadily improving and boosting demand for newbuild homes.

The pace of interest rates cuts remains uncertain. On the one hand, policymakers may feel compelled to cut interest rates to stimulate the weak UK economy. But their appetite to cut could be tempered by the problem of rising inflation.

Despite this uncertainty, Springfield Properties’ perky dividend forecasts merit serious attention in my book. Boosted by land sales in Central Scotland, revenues rose 5.3% in the 12 months to May, while pre-tax profits leapt 95.9%.

Critically for dividends, this recovery pulled the Scottish housebuilder’s net bank debt down to £20.9m at the end of the period from £39.9m a year earlier. So it doubled the full-year cash payout to 2p per share in financial 2025 from a year earlier.

City analysts are expecting further healthy dividend growth, to 2.3p per share this year and 4.5p in fiscal 2027. These figures yield 2.4% and 4.8%, respectively.

Bright forecasts

But how realistic are these forecasts? In my opinion, they’re pretty strong. Dividends for this year and next are covered between 2.1 times and 3.8 times by anticipated earnings. This leaves a wide margin of error in case the housing market recovery weakens.

Balance sheet repairs also put it in a stronger position to weather fresh market volatility, with a net bank debt to EBITDA ratio of just 0.8 as of May.

I’m confident Springfield’s in great shape to capitalise on rising housing demand as the local population grows. It is a leading UK housebuilder. And its new strategy of refocusing on the Highlands, Aberdeen, and Morayshire — where a renewable energy boom is driving jobs creation — could prove especially lucrative.

6% dividend yield

Tritax Big Box REIT (LSE:BBOX) is another dividend share that’s sensitive to interest rate movements. Not only this, but the prospect of a prolonged economic downturn could impact its property occupancy and rent collection.

Yet, City brokers aren’t expecting such risks to impact the real estate investment trust’s (REIT’s) strong recent record of dividend growth. Last year’s reward of 7.66p is tipped to rise to 8p in 2025. Another hike, to 8.4p in 2026, is also anticipated.

As a result, the dividend yield on Tritax shares is 5.7% and 6% for these years.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Shareholder payouts from REITs are sensitive to broader economic conditions. But these property stocks still provide better dividend visibility than most other UK shares, thanks to unique sector rules. At least 90% of rental profits each year need to be returned to investors in the form of dividends.

I’m confident Tritax’s earnings and dividends will steadily rise over the long term, driven by hot growth trends like the growth of e-commerce and booming data centre demand.

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It’s an investment management company. And faced with high interest rates and shaky economies, investors have been favouring savings accounts, gold, and safer things rather than stocks and funds.

With just £10.4bn in assets under management, this is a sector tiddler. And that has to raise the risk.

But the stock was boosted by first-half results. Profit before tax reached £5.4m, and the company held £31.2m cash with no debt. Also by 22 May, 71% of funds were outperforming their sectors.

There’s a forecast 9% dividend yield, which could be at risk as economic pressures continue. This isn’t the safest penny stock out there. But I’d say the recovery potential makes it worth considering.

Biotech rebound?

Avacta Group‘s (LSE: AVCT) a biotech company specialising in diagnostics and therapeutics. The share price had a couple of good Covid years as the company developed test kits. But that’s long since faded and we’ve seen a five-year fall of more than 75%.

At around 34p, at the time of writing, it’s a penny share on that score. And I don’t think the market-cap’s too far out at £135m. The main problem’s a lack of profit.

With full-year results delivered on 6 June, CEO Christina Coughlin said the company’s oncology technology “has the potential to treat up to 90% of solid tumors by repurposing a range of effective oncology drugs to significantly reduce toxicity and side effects.” But it’s only just moving towards the Phase 1 trial stage.

Results showed a loss from continuing operations of £29m, with cash and equivalents of £12.9m on the books at 31 December 2024.

The likelihood of needing more cash seems high. So it’s a very risky one. But the rewards could be significant. Worth a closer look, I’d say.

Property future

I like housebuilders, but AIM-listed Springfield Properties (LSE: SPR) had escaped my eye. We’re looking at a market-cap of £112m, with the share price a few pennies below the magic pound threshold. It was up over 170p in mid-2021. The forecast price-to-earnings (P/E) ratio’s only 7.5.

Revenue fell 13% in the first half, though some blame was directed at Scottish government delays in affordable housing contracts. Scotland? Oh yes, that’s were this builder lays its bricks.

The report showed higher profits, with a gross margin rising to 17.7% from 14.7%. The company said it has a “large, high quality land bank“. And it added that the “long-term fundamentals of the Scottish housing market remain strong“. Net bank debt fell 33%.

I’d say the smaller focus means more risk than nationwide builders. But if we’re seeing the signs of a new bull run, as I suspect, it could be another cheap stock to consider now.

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Both trade on rock-bottom price-to-earnings (P/E) ratios and/or modest price-to-earnings growth (PEG) multiples. Value investors should give them serious consideration right now.

Springfield Properties

The FTSE 100 is the most popular places to go for investors seeking housebuilder shares. I own a handful of the index’s heavyweights (Barratt Redrow, Persimmon and Taylor Wimpey, if you’re wondering).

But today, my gaze has been drawn to AIM housebuilder Springfield Properties (LSE:SPR). This is because of the exceptional value it currently offers.

City analysts think annual earnings will leap 80% this fiscal year (to May). Consequently, it trades on a forward P/E ratio of 7.5 times. On top of this, Springfield’s corresponding price-to-earnings growth (PEG) ratio is just 0.1. Any reading below 1 suggests a share is undervalued relative to expected profits.

However, the cheapness of Springfield’s shares reflects ongoing uncertainty in the housing market. With the UK economy struggling and Stamp Duty rising for first-time buyers, worries over the industry’s resilience continue to swirl.

While nothing’s guaranteed, I’m optimistic the housing market will remain pretty solid, underpinned by further likely interest rate cuts in the coming months. My confidence is shared by Nationwide’s chief economist Robert Gardner.

Despite noting that average prices dropped 0.6% month on month in April, Gardner predicts: “Activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.”

Although Springfield saw revenues fall 13% in the first half, it said in February that its private housing reservation rate is “experiencing signs of increased confidence following interest rate cuts“.

With extra rate cuts tipped for the coming months, I expect trading to keep improving.

Ibstock

Solid support for the housing sector also bodes well for FTSE 250 brick manufacturer Ibstock (LSE:IBST). This is another UK share I own in my portfolio. And I’m considering increasing my holdings given its excellent value for money.

For 2025, City analysts expect annual earnings to jump 25%. This leaves it trading on a sub-1 PEG ratio of 0.8.

Amid the broader housing market improvement, Ibstock’s also enjoyed a trading uptick in recent months. It said in April that “trading conditions improved in the first quarter compared to the prior year period, reflecting increased demand in new build residential construction markets“.

Again, trading conditions here are sensitive to interest rate movements. But I’m hopeful low brick demand may have bottomed out.

Like Springfield, I believe the company has considerable long-term investment potential as the UK’s growing population drives newbuild demand. This is underlined by the government’s pledge to build 1.5m new homes in the five years to 2029.

Despite near-term threats, and the drag of high energy costs on its operations, I think the brickmaker’s another top stock to consider.

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This number can be daunting for those looking to start their investing journey. With this in mind, I’ve selected three top AIM shares I think could look good in a starter portfolio.

Buying AIM shares might deliver market-beating returns. Be aware, however, that it might also be riskier than purchasing large- or mid-cap stocks on the FTSE 100 or FTSE 250 indexes. So investors should carry out thorough research when considering which stocks to buy.

The growth and dividend stock

Springfield Properties (LSE:SPR) is tipped to enjoy an 80% rise in annual earnings this financial year (to May 2025). This reflects recent improvements in the housing market and the builder’s successful efforts to raise margins.

Cost-cutting, land sales, and the end of low-margin legacy contracts meant gross margins rose 300 basis points higher during the first half, to 17.7%.

It’s important to remember that some of these are one-off factors. Furthermore, the homes market recovery could falter if economic conditions worsen, and/or interest rates stay around current levels.

But I still believe Springfield Properties remains an attractive stock to consider, and especially looking at its long-term prospects. Demand for its product could rise strongly as the UK population grows. Government efforts to build 1.5m new homes in the five years to 2029 should also boost the company.

I also like the look of the Scottish housebuilder as a dividend stock. Steps to mend the balance sheet mean cash rewards here are tipped to grow strongly over the next two years.

As a consequence, a dividend yield of 1.6% for this year leaps to 2.7% and then 4.3% for financial 2026 and 2027, respectively.

The value share

Base metals miner Central Asia Metals (LSE:CAML) provides super value based on predicted earnings and anticipated dividends.

For 2025, the company trades on a price-to-earnings (P/E) ratio of 8.1 times. Meanwhile, its corresponding dividend yield is 9.4%.

To put that into perspective, the average yield on FTSE 100 shares is way back at 3.5%.

Central Asia Metals produces copper from the Kounrad mine in Kazakhstan, along with lead and zinc at the Sasa complex in North Macedonia. As a consequence, its share price has soared recently as industrial metal prices (and especially copper values) have exploded.

Base metals are tipped by some analysts to keep rising, too. It’s important, though, to remember that commodity prices are notoriously volatile. Fresh fears over changing US trade policy, for instance, could pull metal values sharply lower again and whack miners’ revenues columns.

Yet from a long-term perspective, I think Central Asia Metals remains an attractive stock to consider. It’s my belief that copper, lead, and zinc demand will rise strongly on a range of phenomena, such as increasing investment in artificial intelligence (AI), the growing green economy, and rising infrastructure and housing spending across the globe.

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1. NextEnergy Solar Fund

Investing in electricity generators could be a great long-term play as global power demand rapidly increases.

In a fresh report this week, the International Energy Agency (IEA) predicted worldwide energy demand growth “will be the equivalent of adding an amount greater than Japan’s annual electricity consumption every year between now and 2027“.

The IEA also upped its growth forecasts for the period, to 4% each year from 3.4% previously. It says demand will be driven by increases in data centres, electric transport, industrial production, and air conditioning.

These are long-term trends that mean shares like NextEnergy Solar Fund (LSE:NESF) could prove great investments over time. This particular company, as the name suggests, generates power from renewable sources which it sells to energy suppliers.

With the fight against climate change stepping up, investing in renewable energy stocks could be a safer bet than companies that generate power from ‘dirtier’ sources.

There is danger in this approach, though. Power generation can sink when solar radiation levels fall, putting NextEnergy’s profits in jeopardy.

However, the FTSE 250 firm’s broad geographic footprint helps reduce this threat at group level. Roughly 85% of its solar assets are in the UK, though they are spread up and down the country. It also produces power in parts of Southern Europe.

I think NextEnergy shares are extremely attractive at current prices. At 66.3p, the fund trades at a 30.4% discount to its net asset value (NAV) per share.

It also has a 12.3% dividend yield, which is one of the largest on the FTSE 250.

2. Springfield Properties

Housebuilders like Springfield Properties (LSE:SPR) also have significant long-term potential as the UK’s population grows.

The Office for National Statistics (ONS) research predicts the number of Brits will leap almost 5m in the decade to 2032. Such potential growth provides excellent opportunities for creators of residential property.

The government plans to build 300,000 new homes between now and 2029 under its current strategy.

Like the rest of the UK, Scotland — which is Springfield Properties’ target market — suffers from a chronic homes shortage that will take years to soothe. Government statistics showed new home starts north of the border fell 17% in the 12 months to last June, to the lowest level since the 1980s.

Given uncertainty over interest rates, there is peril in buying these shares in the near term. But recent signals from the Bank of England (BoE) over rate cuts are encouraging, leading me to believe homebuyer interest could keep improving. Mortgage product wars are also intensifying in a boost to peoples’ afforability.

Springfield is already benefitting from the BoE’s rate-cutting cycle that started last summer. Its latest trading statement revealed “an increased number of private housing reservations” between June and November from a year earlier. Selling prices have also remained robust across its portfolio.

With an undemanding price-to-earnings (P/E) ratio of 12.3 times, I think Springfield Properties could be a great way to consider capitalising on a fresh housing boom.

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With this in mind, here are two companies I think deserve a close look, despite the possibility of some near-term trading turbulence.

Springfield Properties

Data from the housing market remains highly encouraging for builders such as Springfield Properties (LSE:SPR). Latest house price data from Nationwide showed average property values rise at their fastest for two years in November.

This doesn’t mean construction firms are out of the woods just yet. Sales at Springfield — which dropped 19.8% during the financial year to May — may continue to struggle next year. That is, if sticky inflation keeps interest rates around current levels.

However, it’s my belief that this threat may be baked into the firm’s low valuation. At 87p per share, it trades on a forward price-to-earnings (P/E) ratio of 10.9 times. This makes it one of the cheapest housebuilders on the London Stock Exchange.

Meanwhile, Springfield shares also trade on a price-to-earnings growth (PEG) ratio of just 0.8 for fiscal 2025. Any reading below 1 implies a stock’s undervalued.

I believe the robust long-term market outlook makes the builder worth serious consideration. Estate agent Knight Frank believes average home prices will rise a cumulative 19.3% during the five years to 2029. That’s because buyer demand will likely continue to outpace supply.

Analysts at Edison note that “the UK population has risen every year since 1978 and is expected to rise every year for the next 30 years“. Springfield shares could be worth considering as a lucrative way to capitalise on this trend.

Custodian Property Income REIT

Property stock Custodian Property Income REIT (LSE:CREI) is also vulnerable to higher interest rates persisting in 2025.

In this case, unfavourable Bank of England policy could depress its net asset values (NAVs) while keeping borrowing costs above recent norms. Yet like Springfield Properties, I think this threat may be baked into the real estate investment trust’s (REIT) low share price.

At 78.5p per share, Custodian trades at a 18.6% discount to its estimates NAV per share of 96.4p.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

There are other reasons why, as a value investor, I’m a big fan of the trust today. At 7.8% for this financial year (to May 2025), its dividend yield is more than double the 3.6% average for FTSE 100 shares, for instance.

This in large part reflects Custodian’s classification as a REIT. In exchange for tax perks, these UK stocks must distribute a minimum of 90% of their annual profits from their rental operations by way of dividends.

I like this UK share because of its broad diversification which helps to reduce risk. The 152 properties on its books are spread across multiple sectors including office, retail and industrial. Furthermore, it enjoys reliable rental income, thanks to its tenants being tied down on multi-year contracts.

These qualities allow Custodian to provide healthy dividends across the economic cycle. I think it’s worth serious consideration today.

The post Forget short-term pain! 2 dirt cheap UK stocks to consider for long-term gain appeared first on The Motley Fool UK.

Here are two from the London stock market with profits that are tipped to surge. What’s more, they look dirt cheap at current prices.

Pan African Resources

A charging gold price means investing in the precious metals sector could be a good idea. Mid-tier miner Pan African Resources (LSE:PAF) is one of my favourite sector choices right now.

This business operates a string of gold mines in South Africa. And this month it commissioned its Mogale Tailings Retreatment (MTR) asset ahead of schedule and under budget.

The low-cost project will give margins a boost and lift group production to 220,000 ounces by the end of 2025. This couldn’t come at a better time as the gold price booms — the precious metal struck another record high near $2,734 per ounce overnight.

Of course there’s no guarantee gold prices will keep rising. Commodity prices are notoriously volatile, meaning Pan African’s growth projections are by no means nailed on.

But conditions appear to be perfect for bullion values to keep rising. Geopolitical tension is growing, and central banks are stocking up on gold as uncertainty over the US international role grows. A fresh era of interest rate cuts, meanwhile, is fueling inflationary pressures and with them, demand for gold.

City analysts expect Pan African’s earnings to soar 35% in 2024, and by another 34% next year. This leaves the company trading on a forward price-to-earnings (P/E) ratio of 6.7 times and a price-to-earnings growth (PEG) multiple of 0.2.

Any reading below one indicates that a share is undervalued.

As an added bonus, bright growth forecasts mean that dividends are also tipped to rocket over the period. And so the African miner also carries meaty dividend yields of 3.7% and 6.3% for 2024 and 2025, respectively.

Springfield Properties

Housebuilder Springfield Properties (LSE:SPR) has fallen back into penny stock territory below 100p per share. I believe this could be an attractive dip buying opportunity to consider, and especially as the UK housing market rebounds.

City brokers think Springfields’ earnings will rebound sharply from recent heavy drops. A 13% bottom-line rise is predicted for this financial year (to May 2025). A 28% leap is predicted for financial 2026, too.

And so the business trades on a forward PEG ratio of 0.9, below that widely accepted value watermark of one.

Things are looking up for the housebuilders as interest rates fall and mortgage affordability improves. In September, Springfield predicted “strong year-on-year growth in affordable housing revenue as well as a significant improvement in affordable housing gross margin” for this year, with reservation rates rising in the first few months of financial 2025.

Buyer affordability could accelerate rapidly too as inflation moderates. Goldman Sachs tips interest rates to drop to 2.75% in the next year, down from 5% currently.

A fresh economic shock in the UK could hit Springfields’ earnings forecasts. But I still think this growth share’s worth a close look, and especially at current prices.

The post 2 of my favourite cheap growth shares to consider today! appeared first on The Motley Fool UK.

Springfield Properties

Now could be a good time to buy housebuilding shares as homebuying activity accelerates. Latest Bank of England (BoE) data showed there were a 62,000 mortgage approvals in July, beating market expectations and up from 60,600 the previous month.

This reflects improving homebuyer confidence and a favourable drop in mortgage costs. With the BoE tipped to cut its lending rate in the coming months, things could get even better, leading to additional share price gains as trading improves.

Springfield Properties (LSE:SPR) is a stock whose earnings are tipped to soar by City brokers. A 41% bottom-line rise is forecast for the 12 months to May 2025.

As a consequence, the Scottish builder trades on a rock-bottom price-to-earnings growth (PEG) ratio of 0.5. This is despite its share price rising 22% since the start of 2024.

Any reading below 1 implies that a stock is undervalued.

Debt has been a big problem for Springfield more recently as the housing market cooled. It remains something investors need to be mindful of, but so far the firm’s made a good fist of getting it down thanks to land bank sales and effective cost control.

Net debt was £40m as of May, much better than the £55m the FTSE 250 firm had targeted last September.

I particularly like Springfield because of its large exposure to the high-demand affordable homes segment. This has been a problem more recently, with higher costs causing the builder to pause new contracts. But this growth sector still provides excellent long-term growth opportunities.

Reckitt

If I had cash to spare, I’d also consider snapping up Reckitt (LSE:RKT) shares for my portfolio. The FTSE 100 company currently boasts an attractive blend of low earnings multiples and sky-high dividend yields.

For 2024, the household goods giant trades on a price-to-earnings (P/E) ratio of 13.7 times. This is a long way below its five-year average around 21 times.

Its dividend yield, meanwhile, stands at 4.6%. This is a full percentage point above the Footsie’s forward average. And as you can see, the yield rises through to 2026 amid City hopes of steady dividend increases.

As you’ll have noticed, Reckitt’s share price has plunged in 2024. The drop has been driven by growing concerns over potential litigation related to its baby formula division, and the possible impact this could have on its sale. The company is being sued following the tragic death of infants who consumed its Enfamil baby formula.

However, I believe this threat is more than baked into the company’s historically-low valuation. So now could be a good time for be to snap up some shares.

I like the excellent pricing power that Reckitt’s heavyweight brands (like Nurofen painkillers and Durex condoms) enjoy. I’m also excited by its huge exposure to fast-growing emerging markets.

I’ll do some more research on its upcoming court cases before buying. But this is a Footsie share worth serious consideration in my book.

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I reckon both could be worth taking a closer look at for potential growth in the future.

Here’s why I’m seriously considering buying some shares for my holdings.

Affordable housing

In case you’re not familiar with the UK housing market, let me break it down. Demand is outstripping supply. This is something that needs to be addressed as the population grows. Next, as the economic turbulence continues, many are struggling to find affordable housing.

Enter Springfield Properties, a Scottish housebuilder that specialises and focuses on affordable housing.

Inflationary pressures have hurt the business, and wider industry. For example, it had to put many projects on hold as they were just deemed too costly and not feasible. Continued turbulence is something that I’ll keep an eye on that could hurt the firm. Plus, looking at Springfield’s balance sheet, debt levels could be something to be worried about, but this is a lesser worry if it can win new contracts and perform well.

It seems as inflation has fallen, the business is now moving forward once more. Over £40m worth of new business has been signed in total over the past eight months. Things are looking up, if you ask me.

Plus, at present, Springfield shares may be seriously undervalued, providing a great opportunity to buy cheaper shares. The book value of its assets and land values came in at around 125p per share. As I write, the shares are trading for 88p.

Springfield is a prime example of a stock that could soar once volatility subsides, if you ask me.

Netcall

By now, you may have read that artificial intelligence (AI) is the next big thing. Apart from the major names in the industry jostling for dominance, there are smaller firms like Netcall making waves in the industry too.

Netcall specialises in AI-powered customer engagement software and process automation. It can count impressive businesses like Legal & General, the NHS, and Nationwide, as customers.

Looking at Netcall’s story, I can understand why it’s doing well. For example, performance has been growing nicely in recent years. Over the past five years, revenue has grown by over 60%. Plus, analysts reckon this trend of growing revenue is set to continue for the next two fiscal years. However, I’m conscious that past performance is not an indicator of the future. Plus, forecasts don’t always come to fruition.

The biggest issue I have with Netcall shares right now is the valuation. The shares trade on a price-to-earnings ratio of 34. I can understand this, as the potential for the software and AI implications could offer tremendous growth in the future. However, if growth were to slow, or a product issue were to occur, the shares could drop dramatically.

Overall, I reckon there’s lots to like about Netcall. It may not be going toe to toe with the AI big boys out there, but it’s quietly chipping away and making its own position in this burgeoning industry.

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In other words, we’re not simply looking to cash out when a former penny stock hits the big time. Instead, as Fools, we’re looking for long-term investments in quality — but perhaps underappreciated — companies.

Facilities by ADF

What it does: ADF provides serviced production facilities to the film and television industry in the United Kingdom.

By Mark David Hartley. Currently trading at 56p per share with a market cap of £44.9m, I think Facilities by ADF (LSE:ADF) has strong growth potential.

Its price-to-earnings ratio (P/E ratio) is 7.5 times and earnings per share (EPS) growth rate is 32.5%. With this, I can calculate its price/earnings to growth (PEG) ratio by dividing the P/E ratio by the EPS growth rate:

7.5 / 32.5 = 0.23

In general, a good PEG ratio is considered to be anything less than 1.0. ADF’s PEG ratio of 0.23 indicates the company is significantly undervalued and likely to experience positive growth soon.

However, ADF has a high level of non-cash earnings, resulting in weak cash flow relative to earnings. This could indicate lower quality earnings which could threaten growth. Furthermore, it lacks a significant dividend track record and recently diluted shareholder earnings by issuing 6.5% more shares.

Mark David Hartley does not own shares in Facilities by ADF.

Revolution Beauty

What it does: Revolution Beauty sells make-up, skincare and hair products to major retailers, as well as selling online. 

By Jon Smith. If it’s possible to have an undervalued penny stock, I think Revolution Beauty (LSE:REVB) fits the bill. Since the IPO in 2021, the stock has been hit hard with a lengthy accounting scandal. With both the CEO and CFO now out of the business, I think the storm has passed.

With a market cap of £96m and a share price gain of 20% over the past year, I think the firm can get back to better days when the firm was larger in size. With boohoo holding a 27% stake in the firm and appointing former CFO Neil Catto to serve at Revolution as of January, I believe the business is ready to start a new chapter.

Fundamentally, the business has good clients and is present in major retail stores. It has the right platform to grow, although the hangover from the accounting problems could linger for longer than I expect.

Jon Smith does not own any of the shares mentioned.

Springfield Properties

What it does: Springfield is a Scottish housebuilder with a focus on building private and affordable housing.

By Roland Head. I’m optimistic about the outlook for Springfield Properties (LSE: SPR), especially after the firm recently reported a new £15m affordable housing contract.

The company says that reduced build cost inflation has allowed to start bidding for new projects again, after a temporary pause. Over the last eight months, £40m of new contracts have been signed.

Despite this improved outlook, Springfield’s shares are continuing to trade well below the book value of its land and property assets. These were last reported at about 125p per share, well above the current share price.

The risk is that in a housing market downturn, the value of Springfield’s assets could fall. Debt problems are another potential concern, but my feeling is that the company’s finances look safe enough for now.

If Springfield’s trading continues to recover this year, I think the shares could gradually re-rate to trade above their book value, as they have done previously.

Roland Head does not own shares in Springfield Properties.

Topps Tiles

What it does: Topps Tiles is a tile, stone, laminate and and flooring retailer, and sells related products.

By Alan Oscroft. The Topps Tiles (LSE:TPT) share price recovered quickly from the Covid pandemic. But it then got a kicking from the property market slump.

The shares have lost around a third of their value in the past five years. And that takes Topps down into penny stock territory, with a share price of under 50p and a market cap of around £92m.

I think we might see weakness ahead, with some delay between mortgage rates starting to soften and the demand for building materials picking up.

And a price-to-earnings (P/E) ratio of 13 might not look all that cheap for 2024. But forecasts show it dropping as low as 8.5 in 2025 with earnings set to rise sharply.

I treat forecasts with caution. But if it comes off, I think we could be looking at a winner here.

And while we wait, there’s a forecast dividend yield of 8%.

Alan Oscroft has no position in Topps Tiles.

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