Final Results

Reliance Security Group PLC
24 June 2004


EMBARGOED UNTIL 7.00 AM
THURSDAY 24 JUNE 2004
                                                                   PRESS RELEASE

                          Reliance Security Group plc
                  Preliminary announcement of results for the
                            year ended 30 April 2004

                                   
     •    Solid organic growth and ongoing investment in new markets and 
          segments

     •    Turnover up 9.0% to £292.3 million (2003 : £268.1 million)
          
     •    Pre-exceptional, pre-tax profit up 4.9% to £13.2 million (2003: £12.6
          million). Profit before tax up 98.3% to £11.9 million (2003: £6.0 
          million)

     •    Non-cash, exceptional charge of £1.3 million to write down carrying 
          value of quoted investment in Command Security Corporation and 
          goodwill relating to Goldrange Limited

     •    Basic earnings per share, excluding exceptional items, up 4.7% to 
          40.2p (2003: 38.4p), basic earnings per share 34.5p (2003: 9.3p)

     •    Dividend per share up 9.7% to 16.9p (2003 : 15.4p)

     •    Net cash generation from operations of £12.5 million (2003 : £13.9
          million) and net cash of £10.5 million at the year-end (2003: £4.8 
          million)

     •    Forward order book for Facilities Management businesses now £700 
          million (2003: £267 million)

Brian Kingham, Chairman, commenting on the results said:

'We have continued to grow and improve our businesses, increasing the value
added for customers, despite challenging market conditions. Recent major
contract wins well position the Group for further growth'

Notes to Editors

Reliance is an established market leader in the provision of contract security,
facilities management and support services and in business process outsourcing.
Reliance employs over 12,000 people from a network of offices throughout the UK.

For further information:
Brian Kingham                    Chairman                        020 7730 9716
Neil French                      Group Finance Director          01895 205002


Chairman's Statement

Introduction

I am pleased to report we have achieved solid organic growth in turnover and
underlying profit in the year to 30 April 2004. Whilst we have experienced
challenging market conditions in our management and manpower security business,
particularly in the latter part of the year, our markets in facilities
management, business process outsourcing and support services have continued to
grow. We have benefited from our ongoing investment in management and business
development infrastructure. In addition, major contract wins in the second half
of the year leave the Group well positioned for further growth.

Results

Turnover for the year to 30 April 2004 increased by 9.0% to £292.3 million
(2003: £268.1 million). Pre-exceptional, pre-tax profit for the year rose by
4.9% to £13.2 million (2003: £12.6 million). Excluding exceptional items,
earnings per share rose by 4.7% to 40.2p (2003: 38.4p). Cash generated from
operations was £12.5 million (2003: £13.9 million) and we ended the year with
net cash of £10.5 million (2003: £4.8 million).

Dividend

A final dividend is proposed of 13.1p making a total for the year of 16.9p, 9.7%
higher than last year (2003: final dividend 11.95p, total 15.4p). The proposed
final dividend is subject to approval at the AGM on 7 September 2004 and payable
on 24 September 2004 to shareholders on the register on 3 September 2004.

Strategy

Our long-term strategy is to build value for our shareholders by growing
recurring revenues from a complementary range of products and support services
delivered to businesses and the public sector. We will strengthen our leadership
position in security and continue to increase our share of the £60 billion per
annum facilities management and business process outsourcing market. A passion
for excellence of service and an unremitting drive to add increasing value for
our customers through high quality teamwork, appropriate technology and the use
of innovative business processes are at the heart of our strategy. Growth will
be generated organically and through new start-ups complementary to our core
competencies.

Security Services

We have grown turnover by 6.7% year-on-year. Market conditions became more
challenging as the year progressed, with continuing pressure on margins and
lower levels of new business in our management and manpower security business.
We believe that, in addition to problems in the wider economy, uncertainty about
the effects of the impending regulation of the private security industry has
contributed to the difficult market conditions. Regulation will take the form of
licensing individuals employed in security work and starts in 2005.

Despite the overall subdued market conditions, some segments were buoyant and
offered considerable opportunity. We grew our dedicated security services for
empty buildings, including remote monitoring, and won new business to secure ATM
cash points. We increased our business with the public sector. Interesting
opportunities became available in the health and education sectors to develop
products and services to meet specific market needs. One such scheme involved
the design of an electronic signalling system as well as the rapid response
infrastructure to care for the security needs and give reassurance to lone
health visitors. The increasing demands resulting from Health and Safety
legislation and the duty of care on employers have created notable new
opportunities. We have been active in the retail segment and, despite strong
competition, have won important contracts with Boots and Tesco, among others. In
partnership with a number of leading retailers, insurers and unions, we
completed a project with the British Retail Consortium to provide video training
to help protect front-line staff from violence, threats and intimidation.

Among others, we won significant contracts with the Metropolitan Police, Eli
Lilly Pharmaceuticals, Cheltenham and Gloucester Building Society and Kings
College, London. We also won a contract to operate the tollbooths on the new
Midlands Expressway. We have experienced a much increased level of customer
interest in security solutions which harness new technologies through
imaginative design and offer manpower savings. This is reflected in the
continued growth we have enjoyed in our remote surveillance business, a welcome
reward for the investment in the new and enlarged facilities and technology in
2003. Further developments in technology offer customers cost efficiency and
enhanced accessibility to security systems through the utilisation of existing
IT networks and we have designed and installed more than £4 million of
innovative solutions for Bank of America, BAE SYSTEMS, Air Products, Mellon Bank
and Arlington Securities in the year.

We have been delighted to play an active part in what the Home Secretary has
described as the 'wider police family'. At Manchester's Trafford Park, our
Business Watch scheme operating in partnership with the Police Service and the
local authority provides an exemplar; burglary and vehicle crime down by 14% and
20% respectively on the previous year. The Police Reform Act 2002 authorises
Chief Constables to accredit organisations to work in partnership with the
Police to enhance community safety and security. We were delighted to receive
the first such accreditation from Lancashire Constabulary in May. We continued
our work with the Scottish Crime Prevention Centre, and are developing a best
practice register and web site which has the backing of the Association of Chief
Police Officers in Scotland.

Once again, we supported youth mentoring projects and Crime Concern, the leading
crime prevention charity. These initiatives serve to underline our active
support for those working to develop and operate imaginative programmes which
address the causes of crime. This is a long-term investment in communities which
benefits our customers and makes good business sense.

Regulation of Private Security

Regulation of the private security industry, through licensing of individuals by
the Security Industry Authority (SIA), began with the creation of the SIA in
April 2003. Licensing will be phased in over two years, commencing 1 March 2005.
Regulation will provide numerous benefits and open up new opportunities for
growth, especially in the public sector. It is likely to improve wages and
skills but will cause shortages of people available for employment in security.
There will inevitably be an increased cost, which we expect to see reflected in
higher average prices, highlighting the need for innovation to provide greater
added value to customers and the extended use of technology.

Our conference at the Strathclyde Police Headquarters Training Centre in
February was the first public presentation in Scotland of the security industry
regulation model for England and Wales. Regulation of the private security
industry has been endorsed by the Scottish Executive and is expected to be
implemented in due course.

Facilities Management

We have made good progress, growing turnover by 15.2% year-on-year. More
significantly, we have continued to expand our long-term contracted revenue and
our forward order book (being the sales value of contracts currently in hand
over the life of these contracts) is now £700 million (2003: £267 million).

Demand for facilities management and business process outsourcing continues to
grow, particularly in the public sector, offering significant opportunities for
Reliance. We already provide a wide range of facilities management services at
more than 2,500 locations across the UK and employ more than 2,700 people in
these activities. We offer our customers the ready means to bring about
organisational change, to refine business processes through the introduction of
new technology and to improve the efficiency of non-core activities.

We have won a substantial contract with 3M and have renewed important contracts
with Centrex, Accenture, Campbells Soups, Emersons and Unilever. We are also
involved at various stages in bidding for several PFI contracts. We were
delighted to be finalists in two categories of service excellence awards at the
annual 'Premises and Facilities Management' magazine awards, winning the Public
Service Award for our Monteray joint venture, which provides facilities
management services to BT.

Augmenting our capacities to provide engineering expertise for managing the work
place environment, we have made a cash investment of £0.5 million to start a new
business, Reliance M&E Services, providing mechanical and electrical engineering
services, including the installation, maintenance and repair of heating,
ventilation and air-conditioning systems. This supports our FM businesses as
well as growing our recurring income from stand-alone engineering services
provided under long-term contract.

We have made further excellent progress in developing our business process
outsourcing activities in the Criminal Justice System. The services we provide,
throughout mainland UK, include custody provision and court services, forensic
medicine, identity parades, finger printing, DNA testing, electronic monitoring
of offenders, logistics services and administrative services. In January, we
developed and installed in one of our monitoring centres a new IT system to
support warrant enforcement work for the courts. After extensively publicised
initial teething problems, the mobilisation of the 7-year £150 million contract
to provide infrastructure and services for prisoner escorting and court custody
in Scotland is proceeding smoothly, the first phase of service delivery having
begun on 5 April. As recently announced, we have been awarded a similar, £250
million contract in South Wales, the Midlands and the West of England, with
service delivery commencing at the end of August. In conjunction with our
funding partner, HBOS, we have recently been awarded a 30-year £30 million PFI
contract to finance, design, build and provide support services for a new Police
Headquarters for Gloucester Constabulary. We continued to increase our work for
the Forensic Science Service, providing a daily service for 37 of the 43 Police
Service areas in England and Wales.

We continue to invest in management and business development resources in
pursuit of further growth.

Exceptional Items

In July 2003, we completed the disposal of our 16.1% investment in Chesterton
International plc, as expected, for a cash consideration of £1.6 million.

Last year, I explained that the federalisation of certain aviation security
activities by the United States government resulted in our decision to dispose
of our investment in Command Security Corporation, and we wrote down the
carrying value of the investment in Command by way of a £3.3 million exceptional
charge. In May 2004, we completed the sale of our interests in Command to a US
institutional investor for a cash consideration of $2.85 million. We have
further written down the carrying value of the investment to reflect its net
realisable value, taking an exceptional charge of £0.3 million against this
year's profits. In view of the disposal in May, the investment is classified as
a current asset in the Group's year-end balance sheet. The contribution to Group
profits from Command Security Corporation in 2003/04 was less than £0.1m (2002/
03: £0.3million).

We have reviewed the goodwill relating to Goldrange Limited, the Group's event
security business, acquired in March 2001, for impairment and, in light of the
current prospects for the business, have concluded that it would be prudent to
write down its carrying value by £1.0 million.

In total, therefore, we have incurred a non-cash, exceptional charge of £1.3
million this year.

People

Our people, their professionalism and skill, their commitment and optimism is
what makes our businesses great and I take this opportunity to record my warmest
thanks on behalf of the board. An exceptionally high proportion of our people,
over 90%, are in the public eye and are called upon to provide high levels of
interpersonal and communications skills. More than 1,300 letters of praise for
employees were received this year, offering a wonderful commentary on the
dedication of our people in delivering the Reliance Difference. It was a special
pleasure to see Reliance people win 11 of the 35 British Security Industry
Association commendations, the most achieved by any company.

In common with our other businesses, Reliance Integrated Services and Reliance
Monitoring Services achieved Investors In People and ISO 9000 accreditation.
Investors In People inspires our approach to investing to enable our people to
improve their knowledge and skills. It is the framework for continuously
improving the performance of the business and making us more competitive through
a planned approach to setting and communicating business objectives and
developing our people to meet these objectives. We will be working hard to
improve upon the high scores achieved this year in our employee opinion
assessments, which are based on criteria used in the Sunday Times' annual survey
of '100 Best Companies to work for'.

In March we were delighted to welcome Nigel Forbes as Managing Director of
Reliance Security Services. With a strong track record of achievement in
contract services, Nigel has settled in quickly and is leading us in the changes
we are making to meet the exciting opportunities of a regulated industry. In
August we welcomed Barry Nealon as Chairman of Reliance Integrated Services.
Barry, a chartered surveyor, brings us distinct entrepreneurial flair and a
wealth of experience in major property developments and solutions.

The Future

The Directors believe that market conditions in security services are likely to
remain challenging in the period leading up to regulation of the private
security industry in the spring of 2005. We continue to believe that, when fully
implemented, regulation will greatly benefit the industry and its customers and,
accordingly, we are confident that market conditions will improve in the long
term. Meanwhile, there are growth segments and specialist opportunities which we
will pursue with imagination and vigour.

We expect that demand for facilities management and business process outsourcing
will continue to grow, particularly in the public sector. This dynamic, £60
billion per annum market offers significant opportunities for Reliance to
sustain growth and pursue its strategy through the development of longer term,
higher value added contracts. In addition, recent major contract wins well
position the Group for further growth.

We expect that the Group will make further progress in the coming financial year
and maintain its strong financial position.

Brian Kingham
Chairman

Financial review

Overview

In the year to 30 April 2004, the Group has achieved solid growth in turnover
and underlying profit and has generated a substantial cash inflow.

Turnover for the year increased by 9.0% to £292.3 million (2003: £268.1
million), reflecting good organic growth in the Group's operating companies. In
the period 1999-2004, the Group has grown its turnover at a compound annual rate
of 17.4%.

Pre-exceptional, pre-tax profit for the year rose by 4.9% to £13.2 million
(2003: £12.6 million), reflecting growth in both Security Services and
Facilities Management. In the period 1999-2004, the Group's pre-exceptional,
pre-tax profits have increased at a compound annual rate of 14.3%.

Net cash inflow from operating activities, after funding significant organic
growth in the year, was £12.5 million (2003: £13.9 million) and the Group ended
the year with net cash of £10.5 million (2003: £4.8 million).

Exceptional item

The £1.3 million non-cash, exceptional charge relating to the write-down of the
carrying value of the quoted investment in Command Security Corporation and the
goodwill associated with Goldrange Limited is explained fully in the Chairman's
Statement.

Accounting matters

No new accounting standards have been adopted in preparing the Group's 2003/04
accounts.

The Group does not currently operate a defined benefit pension scheme, so the
requirements of FRS 17 'Retirement Benefits' do not currently apply.

The Group expenses all pre-contract costs except for certain directly
attributable costs which, when it is virtually certain that a contract will be
awarded, are capitalised and written off over the life of the contract. The
element of bid costs so capitalised this year was approximately £0.2 million
(2003: £nil) and the total carrying value of such costs in the Group's balance
sheet at the year-end was £0.2 million (2003: £nil). The Group expenses all
other business development costs, amounting to several million pounds per annum,
when incurred.

In connection with certain large, long-term contracts, the Group incurs start-up
costs in the period between contract award and the commencement of service
delivery. Where such costs are not reimbursed at the outset, they are held on
the Group's balance sheet and recovered over the life of the underlying
contract. The element of start-up costs so capitalised this year was
approximately £1.6 million (2003: £0.2 million) and the total carrying value of
such costs in the Group's balance sheet at the year-end was £1.7 million (2003:
£0.4 million).

The Group's policy is to minimise its investment in special purpose vehicles
established in connection with PFI contracts, subject to commercial
considerations, and a rigorous risk assessment is undertaken in respect of all
such investments. Currently, the nature of the Group's participation in such
vehicles does not require it to consolidate any share of their results. The
total cost incurred by the Group to date in such investments is £0.5 million
(2003: £0.3 million).

The Group continues its preparations for the introduction of International
Accounting Standards, which will become effective for its 2005/06 year-end. A
project team has been established to review all existing and proposed changes to
International Accounting Standards to assess the impact on the Group's profit
and loss account, balance sheet and cash flow statement, and to identify and
implement any changes to financial reporting processes that may be required.

Group results

Operating margin

Challenging market conditions in the Security Services segment led to a slight
decline in underlying gross margin in that segment. This led to Group gross
margin falling slightly to 18.8% (2003: 19.0%) despite a small improvement in
gross margins in the Facilities Management segment.

The ratio of administrative expenses to turnover was 15.1% (2003: 15.0%),
reflecting continued investment in management, systems and training to support
the Group's continuing growth.

Consequently, the Group's operating margin, the ratio of pre-exceptional
operating profit to turnover, was 3.7% compared with 4.0% in the previous year.

Goodwill amortisation

The charge for goodwill amortisation in the year was £0.3 million (2003: £0.5
million), of which £nil (2003: £0.2 million) was included in share of
associates' operating profit. In addition, as noted above, impairment
write-downs of £1.3 million have been recognised as exceptional items.

Net interest payable

Net interest payable, including the Group's share of interest payable by
associated undertakings, was £0.3 million (2003: £0.5 million) reflecting a
strong cash flow performance throughout the year. Interest cover, excluding
exceptional items, increased to 51 times (2003: 27 times, excluding exceptional
items).

Taxation

The net taxation charge for the year was £4.1 million (2003: £3.9 million)
which, excluding exceptional items, represents an effective rate of 31.0% (2003:
31.1%). The slight decline in the effective rate reflects a modest amount of
unrelieved losses in 2002/03 from our electronic security business.

Earnings per share

Basic earnings per share, excluding exceptional items, increased by 4.7% to
40.2p (2003: 38.4p). In the period 1999-2004, the Group's underlying basic
earnings per share, excluding exceptional items, have increased at a compound
annual rate of 15.1%.

Dividends

Dividends paid or proposed were 16.9p per share, 9.7% higher than in the
previous year. Dividend cover, excluding exceptional items, was 2.4 times (2003:
2.5 times), reflecting the Group's policy of retaining sufficient profit to
facilitate its continuing growth. Over the past five years, the Group's return
on shareholders' funds (the ratio of pre-exceptional, post-tax profit to
shareholders' funds) has consistently exceeded 25%.

Cash flow

EBITDA, excluding exceptional items, increased by 5.0% to £13.8 million (2003:
£13.2 million) reflecting unchanged operating profit year-on-year despite a
significant increase in depreciation charges. Effective cash controls limited
the increase in working capital to £1.4 million (2003: £0.7 million reduction)
notwithstanding a £3.9 million reduction in creditors which arose as a result of
the 53 week year. Consequently, net cash inflow from operating activities was
£12.5 million (2003: £13.9 million).

Group pre-tax profit, excluding exceptional items and associates, has increased
by 1.2% to £10.5 million (2003: £10.4 million). However, after taking account of
unrelieved losses in Reliance High-Tech in 2002/03 and other timing differences,
taxable profits were higher than in 2002/03. As a result, UK corporation tax
paid, at £3.3 million, was £0.3 million higher than in 2002/03.

Lower levels of capital expenditure and financial investment, the sale of shares
by the ESOP trust in satisfaction of share option arrangements and the disposal
of the Group's investment in Chesterton International plc resulted in a cash
inflow from investing activities of £0.2 million (2003: £5.3 million outflow).
The prior year figure principally comprised significant capital expenditure
relating to the successful implementation of major new IT systems and the
Group's investment in a PFI special purpose vehicle.

Acquisitions gave rise to a net cash outflow of £1.0 million (2003: £0.3
million). In April 2004, the Group made a £1.0 million payment on account in
respect of the cost of acquiring the shares in Goldrange Limited not previously
owned by the Group. Completion of this transaction spanned the year-end with a
further £0.2 million paid in May 2004. The prior year figure represented costs
incurred in the year in connection with the acquisition of the shares in
Reliance High-Tech Limited not previously owned by the Group.

Dividends paid, excluding dividends paid in respect of shares held by the ESOP
trust, increased by 13.7% to £3.6 million (2003: £3.1 million).

Cash inflow before financing was £5.6 million (2003: £2.8 million).

For management purposes, the Group focuses on free cash flow, being cash flow
from operating activities less tax and interest paid plus dividends received
from associates. Over time, the Group expects to achieve free cash flow of
approximately 70% of pre-exceptional, pre-tax profit. Over the period of five
years, up to and including the current year, in aggregate, the Group's free cash
flow has been 79.0% of pre-exceptional, pre-tax profit.

As noted above, in the 53 weeks to April 2004 there were thirteen salary
payments and thirteen VAT payments, in each case one more than the previous
year, resulting in a 'one-off' net outflow of £3.9m. Including this structural
change, the Group's free cash flow was 76.0% of pre-exceptional, pre-tax profit.
Excluding these items, the percentage achieved was 105.8%.

Following its success in winning substantial new contracts in the facilities
management sector, the Group will incur significant contract start-up costs in
2004/05, which will be capitalised and recovered over the life of the underlying
contracts. The Group will also make further investments in special purpose
vehicles relating to PFI contracts. These factors notwithstanding, the Group
expects to be modestly cash generative, overall, in 2004/05. The Group's policy
is to maintain committed, medium term borrowing facilities that are more than
sufficient to meet its foreseeable medium term financing requirements.

Segment results

Segment profit, for each segment, comprises profit on ordinary activities after
share of associates' results and before finance charges.

The 'Security Services' and 'Facilities Management' segments include the results
of those of the Group's businesses and associated undertakings that provide to
their customers site-based security services and facilities management services
respectively. Central administrative costs and operating assets have been
allocated to the two segments.

Security Services

Turnover increased by 6.7% to £209.3 million (2003: £196.1 million), reflecting
solid organic growth.

Segment profit increased by 4.3% to £9.1 million (2003: £8.8 million),
principally reflecting an improvement in the performance of the Group's
electronic security systems business and an increased contribution from
associates, offset by some margin pressure in the manned guarding sector. As a
result, operating margin, the ratio of segment profit to turnover, fell slightly
to 4.4% (2003: 4.5%).

Effective control over working capital resulted in a further 12.3% decrease in
operating assets to £11.0 million (2003: £12.6 million). Consequently, the
return on operating assets, the ratio of segment profit to operating assets,
increased to 82.9% (2003: 69.7%).

Facilities Management

Turnover increased by 15.2% to £83.0 million (2003: £72.1 million), reflecting a
number of new contract starts and organic growth in existing contracts.

Segment profit remained unchanged at £4.3 million and segment operating margin
reduced to 5.2% (2003: 6.0%) reflecting further significant strengthening and
enlargement of management and business development teams to provide for
continuing growth.

Control over working capital remained tight but the timing of certain cash
receipts, which fell shortly after the year-end, and a significant investment in
contract start-up costs resulted in a modest increase in operating assets to
£3.6 million (2003: £1.7 million). The return on operating assets therefore
reduced to 118.1% (2003: 251.2%).


Group profit and loss account
for the year ended 30 April 2004 

                                                                                                                      
                                                          Pre-exceptional   Exceptional                               
                                                                    items         items        2004         2003      
                                                  Notes             £'000         £'000       £'000        £'000        
-----------------------------------------------------------------------------------------------------------------       
     
 
Group turnover                                        3           292,292             -     292,292      268,142 
Cost of sales                                                    (237,360)            -    (237,360)    (217,063) 
-----------------------------------------------------------------------------------------------------------------       
Gross profit                                                       54,932             -      54,932       51,079 

                                                          -------------------------------------------------------
Administrative expenses                                           (44,262)            -     (44,262)     (40,327) 
Exceptional goodwill write-off                        4                 -        (1,000)     (1,000)           - 
                                                          -------------------------------------------------------

Total administrative expenses                                     (44,262)       (1,000)    (45,262)     (40,327) 
-----------------------------------------------------------------------------------------------------------------       
Operating profit                                                   10,670        (1,000)      9,670       10,752 

                                                          -------------------------------------------------------
Share of associates' operating profits                              2,769             -       2,769        2,299 
Exceptional goodwill write-off                        4                 -          (280)       (280)      (3,250) 
                                                          -------------------------------------------------------
Total share of associates' operating profits                        2,769          (280)      2,489         (951) 
                                                          -------------------------------------------------------
Profit on ordinary activities before finance                                                                        
charges and amounts written off investments           3            13,439        (1,280)     12,159        9,801 
Exceptional amounts written off investments           4                 -             -           -       (3,314) 
                                                          -------------------------------------------------------
Profit on ordinary activities before finance                                                                        
charges                                                            13,439        (1,280)     12,159        6,487 
Net interest payable                                                                                                
Group                                                                (170)            -        (170)        (379) 
Associates                                                            (91)            -         (91)        (109) 
                                                          -------------------------------------------------------
Profit on ordinary activities before taxation                      13,178        (1,280)     11,898        5,999 
Tax on profit on ordinary activities                               (4,085)            -      (4,085)      (3,903) 
                                                          -------------------------------------------------------
Profit on ordinary activities after taxation                        9,093        (1,280)      7,813        2,096 
Dividends paid and proposed                           5            (3,847)            -      (3,847)      (3,469) 
                                                          -------------------------------------------------------
Retained profit/(loss) for the year                                                                                 
transferred to/(from) reserves                                      5,246        (1,280)      3,966       (1,373) 
                                                          -------------------------------------------------------
Earnings per ordinary share                                                                                          
Basic                                                 6              40.2p            -        40.2p        38.4p 
Effect of exceptional items                                             -          (5.7)p      (5.7)p      (29.1)p 
                                                          -------------------------------------------------------
Restated basic                                        6              40.2p         (5.7)p      34.5p         9.3p 
Diluted                                               6              40.0p              -      40.0p        38.2p 
Effect of exceptional items                                             -          (5.6)p      (5.6)p      (29.0)p 
                                                          -------------------------------------------------------
Restated diluted                                      6              40.0p         (5.6)p      34.4p         9.2p 
-----------------------------------------------------------------------------------------------------------------       

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

There are no material differences between reported and historical cost profits and losses. 


Group statement of total recognised gains and losses
for the year ended 30 April 2004 
                                                                                         
                                                                    2004        2003 
                                                                   £'000       £'000  
------------------------------------------------------------------------------------
Profit/(loss) for the financial year                       
Group                                                              6,226       3,742 
Associates                                                         1,587      (1,646) 
------------------------------------------------------------------------------------
                                                                   7,813       2,096 
Loss on foreign currency translation                                 (82)        (74) 
------------------------------------------------------------------------------------
Total gains and losses for the year                                7,731       2,022 
------------------------------------------------------------------------------------
 

Group Balance sheet 
as at 30 April 2004 
                                                                                                       
                                                                    2004        2003 
                                                                   £'000       £'000 
------------------------------------------------------------------------------------
Fixed Assets                                                                         
Intangible assets: goodwill                                          758       1,969 
Tangible assets                                                    8,027       9,245 
Investments                                                        5,867       6,464 
------------------------------------------------------------------------------------
                                                                  14,652      17,678 
------------------------------------------------------------------------------------
Current assets                                                                       
Stocks                                                             1,670       2,561 
Debtors: Amounts due within one year                              33,822      37,190 
Debtors: Amounts due after more than one year                      1,353         218 
Investments                                                        1,036       1,637 
Cash at bank and in hand                                          14,097       8,849 
------------------------------------------------------------------------------------
                                                                  51,978      50,455 
------------------------------------------------------------------------------------
Creditors: amounts falling due within one year                                       
Borrowings                                                        (3,564)     (3,614) 
Creditors                                                        (33,963)    (38,430) 
Corporation tax                                                   (2,174)     (2,098) 
Proposed dividend                                                 (2,982)     (2,694) 
------------------------------------------------------------------------------------
                                                                 (42,683)    (46,836) 
------------------------------------------------------------------------------------
Net current assets                                                 9,295       3,619 
------------------------------------------------------------------------------------
Total assets less current liabilities                             23,947      21,297 
------------------------------------------------------------------------------------
Creditors: amounts falling due after more than one year                              
Borrowings                                                           (80)       (412) 
Provisions for liabilities and charges                              (217)     (1,155) 
------------------------------------------------------------------------------------
Net assets                                                        23,650      19,730 
------------------------------------------------------------------------------------
Capital and reserves                                                                 
Called up share capital                                            1,165       1,164 
Share premium account                                              2,320       2,285 
Revaluation reserve                                                  152         152 
Profit and loss account                                           20,013      16,129 
------------------------------------------------------------------------------------
Equity shareholders' funds                                        23,650      19,730 
------------------------------------------------------------------------------------
 
 
Group cash flow statement
for the year ended 30 April 2004 
 
                                                                                                    2004       2003 
                                                                   Notes                           £'000      £'000  
--------------------------------------------------------------------------------------------------------------------
Net cash inflow from operating activities                              7                          12,462     13,906 
--------------------------------------------------------------------------------------------------------------------
Returns on investments and servicing of finance                                                                     
Interest received                                                                                    142         27 
Interest paid                                                                                       (267)      (363) 
Interest element of finance lease repayments                                                         (30)       (45) 
Dividends received from associates                                                                   977        923 
--------------------------------------------------------------------------------------------------------------------
Net cash inflow from returns on investments and servicing of                                                        
finance                                                                                              822        542 
--------------------------------------------------------------------------------------------------------------------
Taxation                                                                                                            
UK corporation tax paid                                                                           (3,272)    (2,932) 
--------------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment                                                                        
Purchase of tangible fixed assets                                                                 (1,756)    (4,842) 
Investment in special purpose vehicles                                                              (188)      (267) 
Purchase of own shares by ESOP                                                                         -       (296) 
Sale of own shares by ESOP                                                                           450         66 
Sale of current asset investment                                                                   1,637          - 
Sale of tangible fixed assets                                                                         42         23 
--------------------------------------------------------------------------------------------------------------------
Net cash inflow / (outflow) from investing activities                                                185     (5,316) 
--------------------------------------------------------------------------------------------------------------------

Acquisitions                                                                                                        
Purchase of subsidiary undertakings                                                               (1,000)      (251) 
Investment in associates                                                                             (44)       (13) 
--------------------------------------------------------------------------------------------------------------------
Net cash outflow from acquisitions                                                                (1,044)      (264) 
--------------------------------------------------------------------------------------------------------------------
Equity dividends paid                                                                             (3,559)    (3,131) 
--------------------------------------------------------------------------------------------------------------------
Net cash inflow before financing                                                                   5,594      2,805 
--------------------------------------------------------------------------------------------------------------------

Financing                                                                                                           
Issue of ordinary share capital                                                                       36         21 
Increase in short term borrowings                                                                      -      1,844 
Capital element of finance lease repayments                                                         (382)      (314) 
--------------------------------------------------------------------------------------------------------------------
Net cash (outflow) / inflow from financing                                                          (346)     1,551 
--------------------------------------------------------------------------------------------------------------------
Increase in cash in the year                                           8                           5,248      4,356 
--------------------------------------------------------------------------------------------------------------------
                                                                                                                      
Reconciliation of net cash flow to movement in net cash                                                             
Increase in cash in the year                                                                       5,248      4,356 
Net cash outflow/(inflow) from borrowings and finance lease repayments                               382     (1,530) 
--------------------------------------------------------------------------------------------------------------------
Change in net cash resulting from cash flows                                                       5,630      2,826 
New finance leases                                                                                     -        (96) 
--------------------------------------------------------------------------------------------------------------------
Movement in net cash in the year                                                                   5,630      2,730 
Opening net cash at start of year                                                                  4,823      2,093 
--------------------------------------------------------------------------------------------------------------------
Closing net cash at end of year                                        8                          10,453      4,823 
--------------------------------------------------------------------------------------------------------------------
 
The accompanying notes are an integral part of this consolidated cash flow statement.  

Notes to the accounts
for the year ended 30 April 2004

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 April 2004 or 25 April 2003, but is
derived from those accounts. Statutory accounts for 25 April 2003 have been
delivered to the Registrar of Companies and those for 30 April 2004 will be
delivered following the Company's annual general meeting. The auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under s237(2) or (3) Companies Act 1985.
     
1    Accounting Convention

     The Group accounts have been prepared in accordance with applicable United
     Kingdom accounting standards and under the historical cost convention, as
     modified by the revaluation of land and buildings. Accounting policies have 
     been consistently applied in dealing with items which are considered 
     material in relation to the Group's accounts. The financial years of all 
     Group companies are the 52 or 53 weeks up to the Friday before, or falling 
     on, 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 or sold during the year are
     consolidated for the periods from or to the date on which control passed. 
     As permitted by section 230 of the Companies Act 1985, a profit and loss 
     account is not presented for Reliance Security Group plc.

3    Segmental information

                                  Turnover         Segment profit     Operating assets
                              2004       2003      2004      2003      2004      2003
                             £'000      £'000     £'000     £'000     £'000     £'000
--------------------------------------------------------------------------------------
By activity
Security services          209,264    196,076     9,140     8,763    11,027    12,569
Facilities management       83,028     72,066     4,299     4,288     3,641     1,707
--------------------------------------------------------------------------------------
                           292,292    268,142    13,439    13,051    14,668    14,276
--------------------------------------------------------------------------------------

Segment profit is profit on ordinary activities, including share of associates'
operating profits, before finance charges and exceptional items.

Operating assets are those net assets controlled by Reliance's operating
divisions and reconcile with net assets as follows:

                                                          2004      2003
                                                         £'000     £'000
-------------------------------------------------------------------------
Operating assets                                        14,668    14,276

Items excluded:-

Net cash                                                10,453     4,823
Listed and unlisted investments and loans                  455     1,904
Investment in own shares                                 2,831     3,179
Taxation payable                                        (2,174)   (2,098)
Deferred taxation                                          436       362
Dividends payable                                       (2,982)   (2,694)
Interest payable                                           (37)      (22)
-------------------------------------------------------------------------
Total net assets                                        23,650    19,730
-------------------------------------------------------------------------

In accordance with the equity method adopted for accounting for associates,
Group turnover excludes turnover of associated undertakings. All Group turnover
is derived from within the United Kingdom and represents the amount receivable
for services supplied net of VAT.
          
4    Exceptional items

     The exceptional item of £1,000,000 shown within administrative expenses 
     relates to the impairment of goodwill associated with Goldrange Limited, on 
     the basis of a directors' valuation.

     The exceptional item of £280,000 (2003: £3,250,000) shown within share of
     associates' operating profit relates to the impairment of goodwill in the
     Group's associated undertaking, Command Security Corporation, on the basis 
     of a directors' valuation. This investment was sold at its adjusted 
     carrying value shortly after the end of the financial year and, 
     accordingly, it has been reclassified as a current asset.

     The exceptional item of £3,314,000 shown as amounts written off investments 
     in the year to 25 April 2003 relates to a reduction in the carrying value 
     of the Group's investment in Chesterton International plc, reflecting its 
     then expected net realisable value. This investment was sold at its 
     adjusted carrying value in June 2003, realising a net cash inflow of 
     £1,637,000.

5    Dividends paid and proposed

                                                          2004         2003
                                                         £'000        £'000
----------------------------------------------------------------------------
Interim paid 3.80p (2003: 3.45p) per share                 892          803
Final proposed 13.10p (2003: 11.95p) per share           3,053        2,783
----------------------------------------------------------------------------
                                                         3,945        3,586

Dividends payable to the ESOP trust                        (98)        (117)
----------------------------------------------------------------------------
Total dividend for the year                              3,847        3,469
----------------------------------------------------------------------------

The assets and liabilities of the ESOP trust are reflected in the Group balance
sheet. The dividends payable to the ESOP trust are therefore excluded on
consolidation.

6    Earnings per share
                                                            2004          2003
                                                           £'000         £'000
-------------------------------------------------------------------------------
Earnings                                                   7,813         2,096
-------------------------------------------------------------------------------
                                                            2004          2003
                                                          Number        Number
-------------------------------------------------------------------------------
Weighted average number of shares                     23,301,565    23,284,514
Weighted average number of shares held in ESOP trust    (666,395)     (745,940)
-------------------------------------------------------------------------------
Shares used to calculate basic earnings per share     22,635,170    22,538,574
Dilutive potential shares                                 82,177       145,458
-------------------------------------------------------------------------------
Shares used to calculate diluted earnings per share   22,717,347    22,684,032
-------------------------------------------------------------------------------

The basic and diluted earnings per share have been calculated in accordance with
FRS14, based on profit after tax and the weighted average number of ordinary
shares in issue during the year, less shares held by the ESOP trust.

7    Reconciliation of operating profit to net cash inflow from operating
     activities
                                                            2004          2003
                                                           £'000         £'000
-------------------------------------------------------------------------------
Operating profit                                           9,670        10,752
Depreciation charges                                       2,894         2,070
Amortisation of goodwill                                     323           337
Exceptional impairment of goodwill                         1,000             -
Gain on sale of fixed asset investments                     (102)            -
Loss on disposal of fixed assets                              38             7
Decrease / (increase) in stocks                              891          (973)
Decrease / (increase) in debtors                           2,282        (1,677)
(Decrease) / increase in creditors                        (4,534)        3,390
-------------------------------------------------------------------------------
Net cash inflow from operating activities                 12,462        13,906
-------------------------------------------------------------------------------



8     Analysis and reconciliation of net cash

                                            26 April    Cash flow    30 April
                                                2003        £'000        2004
                                               £'000                    £'000
-------------------------------------------------------------------------------
Cash at bank and in hand                       8,849        5,248      14,097

Loan due within one year                      (3,315)           -      (3,315)
Finance leases and hire purchase contracts      (711)         382        (329)
-------------------------------------------------------------------------------
Total borrowings                              (4,026)         382      (3,644)
-------------------------------------------------------------------------------
Net cash                                       4,823        5,630      10,453
-------------------------------------------------------------------------------



                      This information is provided by RNS
            The company news service from the London Stock Exchange