British Security Group Announces Six Month Interim Results

A summary of the results and of the assets and liabilities of the Group for the last two accounting periods is shown below.

. Turnover was GBP59.1 million (year ended 31 December 2002: GBP112.6 million);

. EBITDA* was GBP16.0 million (year ended 31 December 2002: GBP31.7 million);

. Profit before tax was GBP11.7 million (year ended 31 December 2002: GBP22.9 million)

. Net Cash Inflow from operating activities was GBP12.7 million (year ended 31 December 2002: GBP33.6 million)

. Net Assets was GBP92.8 million (year ended 31 December 2002: GBP107.5 million)

*Earnings before interest, taxation, depreciation and amortisation

The Group's principal operating businesses are the Andrews Sykes plc group and the London Security plc group. The principal activities of the businesses are the manufacture, sale and rental of fire protection equipment (London Security group) and the provision of maintenance services, and the hire, sale and installation of a range of equipment, including portable heating, air-conditioning, drying, ventilation, pumps and temporary accommodation (Andrews Sykes group).

Andrews Sykes group

The salient features of the results for the first half of 2003 compared with the year ended 31 December 2002 are as follows:

· Turnover was £32.4 million (year ended 31 December 2002: £64.4 million on continuing activities);

· EBITDA was £8.5 million (year ended 31 December 2002: £18.1 million on continuing activities);

· Profit on ordinary activities before tax was £5.6 million (year ended 31 December 2002: £12.1 million).

Overall the Andrews Sykes Group shows a much improved result for the first half of 2003 in comparison with the equivalent period last year. 2002 was a year of re-organisation for the Andrews Sykes group linking fixed costs to a sustainable level of turnover. This strategy, combined with a focused management initiative to improve turnover, has resulted in a strong performance from the UK core businesses in the first half of 2003. The group's overseas operations also performed strongly, particularly the well established heating, drying and air conditioning business operating in the Netherlands through Andrews Sykes BV.

London Security group

Financial highlights of the results for the six months ended 30 June 2003 compared with the year ended 31 December 2002 are as follows:

· Turnover was £26.7 million (year ended 31 December 2002: £48.1 million);

· Operating profit was £5.4 million (year ended 31 December 2002: £9.3 million);

· EBITDA was £7.6 million (year ended 31 December 2002: £13.7 million).

The results for the first six months of 2003 have been satisfactory despite the challenging market conditions. These results have benefited from the positive impact of the companies acquired in 2002 (Asco, CFP Cavelle and HUG) and exchange rate movements which have also impacted favourably.

More importantly the integration of Asco into the Group is on plan both operationally and financially. The cost base has been reduced in 2003 through better purchasing of our raw materials and this is expected to impact on the profit and loss account in the second half of the year. The Group is also actively developing new improved ranges of extinguishers and plans to launch these products in the New Year are on schedule.

The company has obtained ISO 14001 certification in line with our previously stated environmental policy.

The London Security Group has enjoyed sustained growth since 2000. Operating profit at 20% of turnover and EBITDA at 28% of turnover are exceptional results and far greater than those enjoyed by our competitors. These figures illustrate our ability to manage service businesses and, as such, it remains a principal aim of the Group to acquire companies in the fire and security sectors to complement and build upon the organic growth demonstrated in recent times.

Group reorganisation

On 4 April 2003 the Company paid an in-specie dividend from the merger reserve (referred to as the contributed surplus account) equivalent to approximately 5% of the Group's investment in both EOI Fire Sarl and EOI Sykes Sarl (the EOI companies). Thereafter, the Company and the minority shareholders in the EOI companies exchanged their shares in the EOI companies for a mixture of new shares in FR Participation Sarl and SK Participation Sarl (the Participation companies), and debt due from the Participation companies. The Participation companies are incorporated in Luxembourg.

As at 30 June 2003 the Company owned 89.9% and 88.1% respectively of the share capital of its two immediate subsidiaries -SK Participation Sarl and FR Participation Sarl, both of which are incorporated in Luxembourg. SK Participation Sarl and FR Participation Sarl own 100% of the share capital in EOI Sykes Sarl and EOI Fire Sarl respectively.