Trading Statement

Reliance Security Group PLC
31 October 2002

TO: CITY EDITORS

EMBARGOED UNTIL 07:00                                            31 October 2002


                    Reliance Security Group plc ('Reliance')


                 Trading Update and Notification of Exceptional

                                Non-cash Charges


The Directors of Reliance Security Group plc announce that, in the six months to
October 25th 2002, the Group's trading performance and cash flow have continued
in line with market expectations. However, the result for this period will
reflect certain exceptional non-cash charges of £7.4 million. The Group will
announce its Interim Results on 5 December 2002.

In view of recent announcements by Chesterton International ('Chesterton')
Reliance has decided to write down its 16.1% investment in Chesterton to market
value. Based on Chesterton's share price at 25 October, the amount of the write
down would be £2.1 million. This approach has been adopted as a matter of
prudence and does not reflect the Directors' view of the ultimate realisable
value of the investment. This write down has no cash effect.

In August of this year, as part of the original acquisition agreement reached in
July 1999, Reliance purchased the remaining 50% of the issued share capital of
Reliance High Tech Limited. This business accounts for less than 5% of the
Group's turnover. It has since emerged that the accounting for costs and work in
progress for the installation of electronic security systems has, over a number
of years, been incorrect. This will be corrected by way of an estimated charge
of £3.8 million against profits. The Board has also decided to write off the
£1.5 million of goodwill relating to this acquisition. Both adjustments are
non-cash items. The provision of electronic security systems remains central to
the Group's Total Security Solutions and its ability to provide greater added
value to customers. Management changes have been effected and plans are being
implemented for greater integration with the Group's wider security business.

With the strengthening and enlargement last year of the finance function and new
financial controls and systems, the Directors of Reliance are confident that a
sound system of internal financial control is in place throughout the Group. The
Group's financial position remains strong, with net cash at the end of the first
half and available committed bank facilities of £20.0 million.

More generally, the Group's underlying performance in the first half of this
financial year has been in line with expectations, with growth in the security,
facilities management and business process outsourcing markets. Reliance has won
significant new business, well spread across a variety of sectors, including
BAA, Centrex, Thames Valley Police, Homebase and Bank of America. Order
prospects are at record levels and the Board is confident that the Group will
continue to perform in line with its expectations in the second half.


Brian Kingham, Chairman commented:


'These one off charges to profits, whilst not affecting cash, are regrettable.
Swift action has been taken to deal with the accounting issues in Reliance High
Tech. Underlying trading performance remains in line with our expectations and
we are confident that we are well placed to achieve long term growth in
shareholder value.'


                                      Ends




Note


Reliance is an established market leader in the provision of total security
solutions, facilities management and outsourced business processes. Reliance
employs over 10,000 people from a network of offices throughout the UK.


Enquiries:


Brian Kingham

Chairman 020 7730 9716


Neil French

Group Finance Director 01895 205002


Geoff Haslehurst

Group Managing Director 01895 205002





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