Final Results

Reliance Security Group PLC
28 June 2001



28th JUNE, 2001


EMBARGOED UNTIL 07:00AM



                         RELIANCE SECURITY GROUP PLC

             PRELIMINARY RESULTS FOR THE YEAR ENDED 27 APRIL 2001


  * Turnover up 17.6% to £179.8 million (2000: £152.9 million)

  * Profit before tax up 16.6% to £9.9 million (2000: £8.5 million)

  * Earnings per share up 21.5% to 30.5p (2000: 25.1p)

  * Dividend per share up 12.4% to 11.8p (2000: 10.5p)

  * Refinement of total security solution, leading to longer term contract
    wins

  * Growth in facilities management and wider support services

  * Focus on specialist skills and market segments and investment in
    complementary businesses



Brian Kingham, Chairman, commenting on the results, said:

'I am delighted to report another year of outstanding progress. Continued
growth in profits was achieved alongside record investment in new businesses
and geographic expansion. Whilst our mainstream growth has been organic, we
have made small add-on acquisitions which complement and strengthen our
specialist skills and competitive position. Our markets in security,
electronic surveillance, facilities management and support services enjoy
continuing growth.'



Notes to Editors

Reliance is an established market leader in the provision of contract
security, facilities management, and support services. Reliance employs over
8,500 people from a network of offices throughout the UK.



Enquiries:

Brian Kingham      Chairman                020 7730 9716

Geoff Haslehurst     Group Managing Director      01895 205002



28 June 2001





CHAIRMAN'S STATEMENT

Introduction

I am delighted to report another year of outstanding progress. Continued
growth in profits was achieved alongside record investment in new businesses
and geographic expansion. Whilst our mainstream growth has been organic, we
have made small add-on acquisitions which complement and strengthen our
specialist skills and competitive position. Our markets in security,
electronic surveillance, facilities management and support services enjoy
continuing growth.

Results

Turnover for the year to 27 April 2001 increased by 17.6% to £179.8m (2000: £
152.9m). Profit before tax for the year rose by 16.6% to £9.9m (2000: £8.5m)
and earnings per share rose by 21.5% to 30.5p (2000: 25.1p).

Dividend

A final dividend is proposed of 9.0p making a total of 11.8p (2000: final
dividend of 8.0p, total 10.5p) subject to approval at the AGM on 12 September
2001 and payable on 18 September 2001 to shareholders on the register on 17
August 2001.

Strategy

Our long term strategy is to build value for our shareholders by growing and
extending our services to business and the public sector. We will strengthen
our leadership position in security and rapidly grow our share of the
facilities management market. A passion for excellence of service and an
unremitting drive to add increasing value for our customers through the
quality of our team and the rigour of our processes is at the heart of our
strategy. Growth will be generated organically, geographically and through new
start-ups and bolt-on acquisitions complementary to our core competencies.

Security Services

We won healthy levels of new business, with contract hours won up 21% on the
previous year. Helped by last year's restructuring of our business development
processes and organisation, we have seen notable growth in all market
segments. Our retail, financial services and distribution activities all
showed organic growth levels above the average. We believe we are the largest
UK provider of specialist security to shopping centres and continued to
strengthen our position, winning contracts with the Arndale - Manchester,
Midsummer Place - Milton Keynes, St George's Centre - Gravesend, Eastgate
Centre - Basildon and the Maltings - St Albans. There has been steady demand
from new economy businesses, with important contracts from EGG plc, Dolphin
Telecom plc, Telewest Communications and Software AG.

Our markets remain highly competitive and we constantly find new ways to add
more value and elevate customer service. We have succeeded in differentiating
Reliance by providing more specialism and by capitalising on our key
strengths: our skilled and well-motivated people, our culture, business
processes and national office network.

Throughout the year, we worked closely with BAE Systems to define and develop
a total security solution, incorporating a range of manpower services and
Patrol Net response vehicles at all their major locations across the UK. This
period of extensive co-operation and feasibility studies forged a unique
partnership and, in June 2001, we announced that we had been awarded sole
supplier status for a five-year contract estimated to be worth £50 million.
The contract will be brought on stream progressively over the next twelve
months.

Furthering our moves to increase specialisms and add-on services, we invested
in 19% of the equity of Safe Estates Services Limited, a start-up electronic
and physical security provider specialising in unoccupied properties. The
business has made satisfactory progress and is ahead of our first year
expectations. We acquired 90% of the equity of Goldrange Limited, a
well-established specialist provider of security and crowd safety services to
the entertainment, sports and events industries.

The passing into law of the Security Industry Regulation Bill will, we expect,
stimulate the creation of new markets for private security as well as a new
era in co-operation and partnership with the public services. We are
optimistic that irresponsible competitive pressure on wages, training and
management support will abate as the demands of regulation bite. Higher
standards and an industry more focused on quality than price will favour our
hard won market positioning for quality and the sound reputation of the
Reliance brand.

Electronic Surveillance

Reliance High Tech Limited has made steady progress towards our vision of
enabling our security employees to be more valuable to customers through
extended use of technology. As a result of increased sales, we expanded our
engineering design, installation and operations support capacities, giving
improved national coverage. A larger proportion of new business has been
higher value access control, closed circuit television and integrated systems,
averaging over £250,000 per installation. We designed and installed systems
for a wide variety of applications for well-known customers, including Federal
Express Inc., Cap Gemini, Stanhope plc and Broadmore Hospital. We also
installed a number of town centre surveillance systems. Significantly, an
increasing number of contracts entail the provision of two or more services
from other group operating businesses.

In March, we acquired from NTL, Europe's leading broadband communications
company, a remote surveillance centre fitted with state-of-the-art
telecommunications facilities and image compression technology. This
investment serves to emphasize our belief that, in future, customers will
require the imaginative use of technology in meeting their total security
needs. In what has been a conservative and cautious marketplace, Reliance
anticipates an increasing demand for a solutions-based approach, blending the
use of human resources with the latest in IT and communications technology.

USA

In November, we completed our first investment outside the UK in the world's
largest and fastest growing security market. We acquired an effective 37% of
Command Security Corporation Inc., a New York based security company. With
last reported turnover at $71 million per annum, Command is believed to be the
15th largest operator in the highly fragmented USA market. This investment
offers Reliance measured involvement in 40% of the world's security market and
a valuable capacity for both parties in conducting trans-Atlantic business at
a time of growing globalisation.

Facilities Management and Support Services

Reliance Integrated Services Limited, our facilities management and specialist
support services company, has made excellent progress. We have more than 1,200
facilities management employees providing services for 2,300 locations across
the United Kingdom, consisting of some 20 million square feet of buildings. We
successfully deliver a wide range of services including help desks, mechanical
and electrical engineering, business critical systems support, energy
management, maintenance of environmental controls and hazardous material
handling. We have developed advanced computer aided facilities management
software providing transparency, economies of scale and efficiencies in the
co-ordination and deployment of multi-skilled work teams.

We believe that the facilities management contract with BT, worth £500 million
over five years, is the largest yet awarded in the private sector. The
contract was signed in March and, with our partners, we successfully completed
mobilisation in April 2001. The innovative structure of this contract,
involving the creation of a stand-alone enabling company, Monteray Limited (in
which the Group has a 24.5% stake), and nine regionally based delivery
companies, has worked well. The scale and complexity of the contract has
provided a welcome opportunity for investment in a new dimension of management
and engineering capability.

Reliance Custodial Services, providing prisoner custody, electronic offender
tagging and other specialist services to the criminal justice system,
continues to increase service excellence and operational efficiencies in this
sensitive and demanding public service. This year, we were delighted to be the
only private sector provider of these services to be awarded a 'Charter Mark'
by the Government Cabinet Office for high achievement in customer service. Our
work for the Forensic Science Service was extended this year from 32 to 52
Police Forces and we were awarded our first warrant enforcement contract, an
activity previously undertaken by the Police Service.

Recognising the wider applications and market opportunities in both the public
and private sector for our specialist skills in secure and sensitive
environments, we have adopted the name Reliance Secure Task Management Limited
which more meaningfully describes our work. One of our first successes has
been a pathfinder £4.2m per annum, 30-year PFI contract to finance, design,
build and operate four facilities for the Police Service. This is now at
Preferred Bidder stage and in the closing stages of contract negotiation.

In December, we announced that we had acquired a 16.1% strategic investment in
Chesterton International PLC at cost of £4.9 million. Chesterton is a leading
international provider of property-related services, including commercial and
residential property management, consulting and facilities management.

People

I take pleasure in this opportunity to pay tribute to the work of our
employees and to thank them warmly. The group owes its success to their
outstanding dedication, teamwork and skills, qualities at the heart of the
Reliance Difference!

Our businesses, with over 90% of employees directly interfacing with
customers, calls for high levels of inter-personal skill, for tact, patience
and care for others. Once again, our people have delighted in meeting
challenges with enthusiasm and professionalism. The award of the Government '
Charter Mark' for high achievement in customer service by employees at
Reliance Custodial was a wonderful further endorsement of these qualities.
This year we received more than 850 unsolicited letters of commendation from
customers and the public. The presence of no less than seven Reliance people
in the British Security Industry Association Awards for Excellence is a public
recognition of our high standards of professionalism and care.

Our employee national consultative group continues to contribute important
advances in business processes and operational efficiency, most notably this
year providing a new Red Book design. In February, an initiative to deepen '
Reliance Difference' best practice brought the creation of a new network of
voluntary communications' champions. As part of our ongoing process of
business improvement, we have again benefited from assistance and expertise
provided by specialist outside organisations including the Best Practice Club
- a group of leading employers with worldclass training and development
policies - and the Confederation of British Industry Probe Study (promoting
business excellence). The benchmarking and best practice initiatives to emerge
from this work have been a valuable influence. Relentless renewal and
re-invention has been a preoccupation throughout the year. Adding value for
customers through multi-skilling and a team-based approach has been a major
success in our facilities management business. New training modules have
lifted multi-skilling to a central place in efficiency gains.

Our 'Investors in People' accreditation remains central to our approach. It
powerfully affirms our belief in enabling our people to improve their
knowledge and skills. It provides a framework for improving business
performance and competitiveness through a planned approach to setting and
communicating business objectives and developing our people to meet these
objectives. We provide a wide variety of in-house training courses, more than
5,000 employees benefiting from training this year. The number of training
days increased by 41% and more than 500 employees have achieved relevant City
and Guilds qualifications. The number of employees receiving management and
supervisory training was increased by 39% and over 60% of appointments to
existing management jobs were made by internal promotions.

Lord Lane retired in April after nine years as a non-executive director. I am
deeply grateful to him for his encouragement, advice and wise counsel and the
directors join me in wishing him a long and happy retirement. Tony Hales,
formerly chief executive of Allied Domecq plc, joined the board as a
non-executive director in January 2001. The Group's executive management team
was significantly strengthened in the year. After five years as group finance
director, Geoff Haslehurst took up the new position of group managing director
and Neil French joined us in April as group finance director, having been
previously finance director of Perry Group plc and APV plc.

Ken Allison took over from me as chairman of Reliance Security Services
Limited ('RSSL') after five years as the highly successful managing director
of that business and Tim Grier has joined us a managing director of RSSL.

The Future

We will build on our competitive strengths through geographic and organic
growth, through focusing on specialist skills and market segments and by
investing in new, complementary businesses which enable us to provide higher
value added, solutions-based services and products for our customers. Our
strong support services and facilities management expertise provides access to
a growing £50 billion market for outsourced business processes.

Building on our strengths and exploiting the opportunities which flow from our
recent investments, we view the future with confidence and, taking into
account the business won in the first eight weeks of the current year, we look
forward to growth in volume and shareholder value in the year ahead.





FINANCIAL REVIEW

Profit and loss account

Turnover for the year was £179.8 million, 17.6% higher than in the previous
year, reflecting organic growth in the Group's operating companies. In the
period 1996-2001, the Group has grown its turnover at an average compound
annual rate of 14.0%.

Gross profit was 19.1% of turnover, in line with last year, and administration
expenses have been contained at 14.0% of turnover (2000: 13.9%), including an
increase in costs resulting from a significant strengthening of management and
the support infrastructure to facilitate future growth.

The Group's share of operating profit from associated undertakings was £0.9
million (2000: nil), principally from the enabling organisation formed to
administer a major facilities management contract.

Net interest payable, including interest arising in associated undertakings,
was £0.1 million (2000: net interest income £0.4 million). During the year the
Group invested £10.5 million in new businesses. The Group acquired stakes in
or control of Command Security Corporation Inc (£4.5million), Safe Estates
Services Limited (£0.4 million) and Goldrange Limited (£0.6 million). The
Group also made a strategic investment in Chesterton International plc (£5.0
million). As a result, at the year end, the Group's net debt was £5.1 million
(2000: net cash £6.6 million).

Profit before taxation for the year was £9.9 million, 16.6% higher than in the
prior year. In the period 1996-2001, the Group's pre-tax profits have
increased at an average compound annual rate of 19.0%.

The net taxation charge for the year was £3.0 million (2000: £2.8 million),
which represents an effective rate of 30.5% (2000: 33.4%).

Dividends paid or proposed have increased by 12.1% compared with the prior
year, and dividend cover has increased to 2.6 times (2000: 2.4 times).

Basic earnings per share increased by 21.5% to 30.5p. In the period 1996 -
2001, the Group's basic earnings per share have increased at an average
compound annual rate of 20.5%.

Cash flow

Net cash inflow from operating activities, after funding significant organic
growth in the year, was £6.5 million (2000: £5.6 million).

The purchase of ESOP shares and fixed asset investments, the acquisition of a
subsidiary undertaking and investments in associated undertakings together
resulted in a cash outflow of £11.0 million (2000: £0.9 million). Excluding
these items, the Group's net cash inflow before financing was £0.1 million
(2000: £1.0 million outflow), after funding net capital expenditure of £1.2
million (2000: £1.7 million) and an increase in dividends paid of 18.7%.





PRELIMINARY ANNOUNCEMENT OF GROUP PROFIT AND LOSS ACCOUNT (AUDITED)

FOR THE YEAR ENDED 27 APRIL 2001

                                                                 2001      2000

                                                      Notes     £'000     £'000
Group turnover                                                179,794   152,888
Cost of sales                                               (145,476) (123,498)
Gross profit                                                   34,318    29,390
Administrative expenses                                      (25,238)  (21,276)
Operating profit                                                9,080     8,114
Share of associates' operating profits                            942         -
Profit on ordinary activities before finance charges           10,022     8,114
Interest receivable (Group)                                       166       458
Interest payable
Group                                                           (212)      (67)
Associates                                                       (60)         -
Profit on ordinary activities before taxation                   9,916     8,505
Tax on profit on ordinary activities                          (3,024)   (2,840)
Profit on ordinary activities after taxation                    6,892     5,665
Dividends                                             3       (2,665)   (2,378)
Retained profit for the year transferred to reserves            4,227     3,287

Earnings per ordinary share
Basic                                                 4         30.5p     25.1p
Diluted                                               4         30.0p     24.8p



All material operations in the group continued throughout both financial
years.

There were no recognised gains or losses other than those recognised in the
profit and loss account.





PRELIMINARY ANNOUNCEMENT OF GROUP BALANCE SHEET (AUDITED)

AS AT 27 APRIL 2001

                                                                  2001     2000

                                                        Notes    £'000    £'000
Fixed Assets
Intangible assets - Goodwill                                     1,847    1,348
Tangible assets                                                  6,585    5,920
Investments                                                     11,906      925
                                                                20,338    8,193
Current assets
Stocks                                                           1,072      523
Debtors                                                         29,528   21,597
Cash at bank and in hand                                             7    8,172
                                                                30,607   30,292

Creditors: amounts falling due within one year                (29,025) (21,350)

Net current assets                                               1,582    8,942

Total assets less current liabilities                           21,920   17,135

Creditors: amounts falling due after more than one year          (821)    (272)

Net assets                                                      21,099   16,863

Capital and reserves
Called up share capital                                          1,153    1,153
Share premium account                                            1,853    1,844
Revaluation reserve                                                152      152
Profit and loss account                                         17,941   13,714

Equity shareholders' funds                                      21,099   16,863





PRELIMINARY ANNOUNCEMENT OF GROUP CASH FLOW STATEMENT (AUDITED)

FOR THE YEAR ENDED 27 APRIL 2001

                                                                    2001    2000

                                                            Notes  £'000   £'000

Net cash inflow from operating activities                    5     6,544   5,588

Returns on investments and servicing of finance
Interest received                                                    166     433
Interest paid                                                      (135)    (12)
Interest element of finance lease repayments                        (45)    (30)

Net cash (outflow)/inflow from returns on investments and           (14)     391
servicing of finance

Taxation
UK corporation tax paid                                          (2,743) (3,193)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                (1,304) (2,700)
Purchase of own shares by ESOP                                     (503)   (398)
Purchase of fixed asset investments                              (5,373)      -
Sale of tangible fixed assets                                         94     970
Net cash outflow from investing activities                       (7,086) (2,128)

Acquisitions
Purchase of subsidiary undertakings                                (593)   (550)
Investment in associates                                         (4,521)     -

Net cash outflow from acquisitions                               (5,114)   (550)

Equity dividends paid                                            (2,489) (2,097)

Net cash outflow before financing                               (10,902) (1,989)

Financing
Issue of ordinary share capital                                        9      95
Increase in short term borrowings                                    504     417
Capital element of finance lease repayments                        (224)    (59)

Net cash inflow from financing                                       289     453

Decrease in cash in the year                                    (10,613) (1,536)





RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/CASH

Decrease in cash in the year                                  (10,613)   (1,536)
Net cash inflow from borrowings and finance lease repayments     (280)     (358)
Change in net (debt)/cash resulting from cash flows           (10,893)   (1,894)
New finance leases                                               (822)        -
Movement in net debt in the year                              (11,715)   (1,894)
Opening net cash at start of year                                6,618     8,512
Closing net (debt)/cash at end of year                         (5,097)     6,618





         PRELIMINARY ANNOUNCEMENT OF NOTES TO THE ACCOUNTS (AUDITED)

                       FOR THE YEAR ENDED 27 APRIL 2001



The financial information set out above does not comprise the Company's
statutory accounts. The auditors have given an unqualified opinion on the
accounts for the year ended 27 April 2001 which will be delivered to the
Registrar of Companies following the annual general meeting. Statutory
accounts for the previous year ended 28 April 2000 have been delivered to the
Registrar of Companies. The auditors' report on those accounts was unqualified
and did not contain any statement under section 237(2) or (3) of the Companies
Act 1985.



1 Accounting Convention

The Group accounts have been prepared in accordance with applicable accounting
standards and under the historical cost convention, as modified by the
revaluation of land and buildings. The financial years of all group companies
are the 52 or 53 weeks up to the Friday nearest the accounting reference date
of 30 April.

2 Consolidation

The consolidated profit and loss account and balance sheet incorporate the
accounts of Reliance Security Group plc and its subsidiary undertakings. The
results of subsidiary undertakings acquired during the year are included in
the consolidated profit and loss account for their respective periods of
ownership.

3 Dividends

In addition to the interim dividend of 2.8p (2000: 2.5p), the directors
recommend a final dividend of 9.0p (2000: 8.0p) which, subject to approval at
the Annual General Meeting on 12 September 2001, will be payable on 18
September 2001 to those shareholders on the register of members on 17 August
2001.

4 Earnings per share

Earnings per share have been calculated on the profit attributable to
shareholders on ordinary activities after taxation of £6,892,000 (2000: £
5,665,000).The basic and diluted earnings per share have been calculated in
accordance with FRS14, based on profit after tax and on the weighted average
number of ordinary shares in issue during the year less shares held by the
ESOP trust.

5 Reconciliation of operating profit to net cash inflow from operating
activities
                                                               2001        2000

                                                              £'000       £'000
Operating profit                                              9,080       8,114
Depreciation charges                                          1,380       1,101
Amortisation of goodwill                                         77          60
Loss / (profit) on sale of fixed assets                           4       (213)
(Increase) in stocks                                          (549)       (264)
(Increase) in debtors                                       (7,931)     (4,422)
Increase in creditors                                         4,483       1,212
Net cash inflow from operating activities                     6,544       5,588



6 Analysis and reconciliation of net debt
                                                        Other
                                                     Non-cash
                         29 April 2000  Cash flow     changes     27 April 2001

                                 £'000      £'000       £'000             £'000
Cash at bank and in hand         8,172    (8,165)           -                 7
Overdrafts                           -    (2,448)           -           (2,448)
                                 8,172   (10,613)           -           (2,441)
Loan due within one year         (967)      (504)           -           (1,471)
Finance leases                   (587)        224       (822)           (1,185)
                               (1,554)      (280)       (822)           (2,656)
Net cash / (debt)                6,618   (10,893)       (822)           (5,097)