AG Barr (BAGFF)

* Recent trading update shows strong performance with increased sales, expanding profit margins, and solid cash flow.
* Company expects record profits for the year ending January 2025, followed by further growth in 2026 due to ongoing investments.
* Margin expansion remains a key focus, with operating margin rising to 13.5% in the year to January.
* Improved profits and cost efficiencies expected from Boost acquisition integration and sales channel shifts.
* Robust balance sheet with net cash of over £60m and a pension surplus.
* Analysts forecast a 10% dividend increase for the year ending January 2025 and a 12% increase for the following year.
* Forward dividend yields of 2.7% and 3.0% may not be particularly attractive for income-seekers.
* Shares trade at 18 times earnings for fiscal 2025, but 14 times for 2026 appears more enticing if profit forecasts hold true.
* Earnings momentum, margin profile, cash flow, and strong balance sheet support the investment case.

Questor's Recommendation: Buy

Hargreaves Services (HGRVF)

* Company specializes in long-term infrastructure projects and brownfield land regeneration.
* Strong demand in services contributing to increased sales, profits, and dividends in the first half.
* Full-year revenue expected to exceed forecasts, driven by large-scale infrastructure projects.
* Increased interim dividend of 18.5p per share.
* Valuation concerns due to shares trading above net asset value per share.
* Growing profitability and lower borrowing costs could boost NAV growth.
* Dividend yield of 5.6% for the year ending May 2025 provides an attractive income stream.
* Questor advises patient waiting for returns from infrastructure deals and land bank optimization.

Questor's Recommendation: Hold