Reliance security, a provider of contract security facilities management, posted profits of £12.6m yesterday against £9.9m last year. But the group said it was taking a £6.6m write-down against the value of its investments in Chesterton and Command Security Corporation, two non-core investments it is disposing of, taking its post-exceptional profits down to £6m.
Reliance had a 16.1 per cent shareholding in Chesterton and a 25.7 per cent stake in Command Security. John Cornfield, an analyst at Hardman & Co, described the sale of the investments in Chesterton and Command as something "out of the company's control".
The group's finance director, Neil French, said the investment in Command Security Corporation "seemed a good investment at the time". But he added that after the 11 September terrorist attacks the US government brought in legislation to bring pre-board screening at US airports under the control of the federal authorities.
"Federalisation had, as expected, an adverse effect on Command's aviator security business," the group said. Recently it has become clear that Command would be excluded from potential security contracts with the US government because of its part-foreign ownership.
Reliance intends to focus on core businesses. The dividend was raised 13.2 per cent to 15.4p. Its shares fell 25p to 480p.Reuse content