Trading Update

Reliance Security Group PLC
7 April 2004


For immediate release                                               7 April 2004


                    Reliance Security Group plc ('Reliance') 

                             Trading Update

The Directors of Reliance are pleased to provide an update, prior to the
commencement of the close period, on the Group's trading performance for the
financial year to 30 April 2004 and to comment briefly on trading prospects for
next year.

In security services, market conditions have become more difficult in the past
few months, with continuing pressure on margins and lower levels of new business
in our management and manpower security services business. We believe that
uncertainty about the effects of the impending regulation of the private
security industry, which took effect in April 2003 with the creation of the
Security Industry Authority, has contributed to the difficult market conditions.
Regulation will take the form of licensing individuals employed in security work
and starts in 2005. Although there will inevitably be an increased cost, we are
convinced that, when fully implemented, regulation will greatly benefit the
industry and its customers.

In facilities management, we have won a substantial contract with 3M and have
renewed important contracts with Centrex, Accenture, Campbells Soups and
Unilever. We are involved at various stages in bidding for sixteen PFI
contracts, one of which we expect will be awarded within the next two months,
and a number of other significant contracts. 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 and the first 
phase of service delivery began on 5 April. As announced in February, we have 
been appointed preferred bidder for a similar, £250 million contract in South 
Wales and the West of England and we expect that a contract will be awarded 
within the next few weeks, with service delivery commencing at the end of 
August. We incur substantial costs in bidding for these contracts. We expense 
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 
capitalised this year is unlikely to exceed £250,000. We continue to invest in 
management and business development resources in pursuit of further growth.

As a result of the pressures in security services and the level of ongoing
investment in facilities management, notwithstanding that cash generation has
been strong, the Directors now expect that the results for this financial year
will be slightly below market expectations. We expect that the Group will make
further progress in the coming financial year and maintain a strong financial
position. At present, however, the Board believes that the Group will achieve a
slower rate of growth than previously expected, with a consequent impact on
market expectations for the year to 29 April 2005. The Directors believe that,
whilst market conditions in security services will improve in the long term,
they are likely to remain difficult in the period leading up to regulation of
the private security industry in the spring of 2005. We are resolved to continue
investing for future growth.

The Directors expect to announce preliminary results for the year to 30 April
2004 on Thursday, 24 June,

Note:

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

Enquiries:
 
Brian Kingham 
Chairman                                      020 7730 9716
     
Neil French 
Group Finance Director                        01895 205002




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