ArmorGroup International plc

For over 25 years ArmorGroup has been recognised as a leading provider of
defensive, protective security services to national governments, multinational
corporations and international peace and security agencies operating in
hazardous environments. ArmorGroup provides protective security services,
security consultancy, security training and mine action services. It has 9,000
highly trained and experienced employees and operations in 38 countries. Over
the past two years it has supported its clients in over 160 countries across the
Middle East, Africa, North and South America, the CIS and central Asia.


http://www.armorgroup.com

ArmorGroup International plc
20 March 2007



ArmorGroup International plc
Strong revenue growth driven by diversification


ArmorGroup International plc, the leading provider of defensive protective
security services, today announces its unaudited preliminary results for the
twelve months ended 31 December 2006.

Key points

Revenues up 17% to $273.5 million, with non-Iraq revenue rising 46% to
US$140 million

Operating profit of $10.6 million (2005: $12.4 million)

Profit before tax of $9.6 million (2005: $12.1 million)

Basic earnings per share of 13.4 cents (2005: 16.2 cents)

Operating cash flow almost doubled to $30.7 million (2005: $15.8 million)

Net debt significantly reduced to $3.6 million at the year end, compared
to $9.4 million at 31 December 2005

Recommended final dividend of 1.5 pence, giving a total of 2.75 pence for
the year (2005: 2.75p)

All figures quoted in this statement are in US$, with the exception of the
dividend.

David Seaton, Chief Executive Officer, commenting on the results announcement
said:

'The Group has achieved good revenue growth with strong underlying operating
profit growth from the protective security division. This positive performance
was offset by an $8.7 million adverse impact of the under-utilisation of our
Iraq training facility resulting from a lack of US and Iraqi funding for
training.

We expect 2007 to show the benefits of the significant management and
operational changes made during 2006 and the medium term strategy outlined
today, as we focus on building long term, sustainable revenues with improving
operating margins. The Board anticipates continuing strong market conditions
over the year and believes that the Group is well positioned to benefit from
that growth. We have started the current year with a number of encouraging new
contract wins and a strong pipeline of identified opportunities, with new and
existing clients.'


Enquiries:


ArmorGroup International plc


David Seaton, Chief Executive Officer Tel: + 44 (0) 20 7808 5800
Matthew Brabin, Chief Financial Officer
Patrick Toyne Sewell, Director of Communications


Citigate Dewe Rogerson

Ged Brumby Tel: + 44 (0) 20 7638 9571



This press release and analyst presentation will be available to download from
the Investor Relations section of the ArmorGroup website at
www.armorgroup.com

today at 7.00 am and 9.30 am respectively. A presentation to analysts will take
place at 9:30am this morning at the offices of Citigate Dewe Rogerson, 3 London
Wall Buildings, London Wall EC2M 5SY.

Notes to Editors

For over 25 years ArmorGroup has been recognised as a leading provider of
defensive, protective security services to national governments, multinational
corporations and international peace and security agencies operating in
hazardous environments. ArmorGroup provides protective security services,
security consultancy, security training and mine action services. It has 9,000
highly trained and experienced employees and operations in 38 countries. Over
the past two years it has supported its clients in over 160 countries across the
Middle East, Africa, North and South America, the CIS and central Asia.

ArmorGroup International plc is headquartered in London and listed on the London
Stock Exchange. It complies with the US Foreign and Corrupt Practices Act, 1997
and the UK's Anti-Terrorism, Crime and Security Act, 2001 and has also been
certified to ISO 9001:2000 and to ISO/IEC 27001:2005. For more information
please visit
www.armorgroup.com
.

Strategic review

The Board's three year objective is to grow revenues and profits significantly
through further diversification, outlined below, and to use its operational
gearing to achieve considerably stronger operating profit margins. The Board
believes the Group's current operating structure can support this revenue growth
and that any increase in revenue will have only a marginal impact on the
overhead base. The Board believes this growth will be achieved by:


further strengthening the Group's global presence;

capitalising on the numerous opportunities which exist for the Group
within the oil, gas and extractive sectors as well as from further
government outsourcing; and

broadening the Group's offering through additional, complementary
security services.


A small number of strategic acquisitions may also play a part in achieving the
Group's objectives.

The private security industry has matured over the last three years with larger,
longer and more complicated contracts, especially in the reconstruction arena.
While ArmorGroup's protective security operation in Iraq continues to expand,
the market outside Iraq is growing more strongly as major organisations
increasingly require their security providers to have the ability and the
resources to provide the highest international experience and standards.

The Board believes the strategy outlined above will give ArmorGroup the best
opportunity to use its competitive advantages to benefit from continued market
growth.


Operational review

2006 was a year of significant management and operational change for the Group
with a new Chief Executive Officer, a new Chief Finance Officer, new directors
for each of the regions, apart from Africa, as well as a number of other senior
appointments. The Board believes these changes have significantly strengthened
the operational and commercial expertise of the Group's leadership. ArmorGroup
now has the senior management team in place to further develop the Group's
business.

Overall revenue grew 17% to $273.5 million with the Group's operations in
Afghanistan, Nigeria and Russia contributing to an overall revenue growth of 46%
outside Iraq. Our operations in Iraq now represent 49% (2005: 59%) of total
Group revenues.

The Group has successfully replaced the revenue from the protection of
reconstruction activities, which fell progressively throughout the year as a
number of major projects were completed, with additional logistic convoy
protection work. The Weapons Reduction and Mine Clearance division recovered
from a weak first half to win major contracts in Lebanon and Sudan in the second
half. Training revenues fell compared to 2005 following the completion of a
major training contract in Iraq at the end of 2005 which was not replaced due to
coalition and Iraqi funding limitations. However, the impact of this fall was
partially offset by Phoenix CP Limited's strong performance in its first year
with the Group.

The Group continued to support an array of Government, commercial and NGO
clients in over 40 countries in 2006.



Divisional overview

Protective Security Division

The Protective Security Division had a strong year with all regions, except
North America, improving revenues and operating profits. Revenues increased by
22% to $244.5 million as a result of particularly strong growth in the second
half in Afghanistan, South America, Nigeria and Russia and continuing high
levels of activity in Iraq.


Middle East

The Group extended its operational footprint in the region, driven by its newly
opened regional office in Dubai. Revenue grew to $139 million (2005: $126
million), with Iraq revenues up 10% to $133 million, and margins improved
despite increased vehicle attrition over the year.

The security situation in Iraq became increasingly unstable over the year with
over 450 hostile actions directed at ArmorGroup personnel. The Group constantly
reviews its operating procedures in Iraq to counter insurgent tactics and has
invested a further $6.8 million to provide enhanced protective equipment for its
employees, including the introduction of higher specification armoured vehicles
in Iraq.

Over the year the focus of the Group's operation in Iraq has changed with the
increase in logistic convoy security for US and Japanese programmes more than
compensating for the reducing level of reconstruction work as the funding draws
to a close. ArmorGroup is now the largest convoy security provider in Iraq,
with the majority of its 1,200 employees assigned to these tasks. In 2006
ArmorGroup teams carried out almost 1,200 convoy support missions, representing
around 30% of all registered convoy missions in Iraq.

The continued growth in Iraq has been combined with the increasing use of Iraqi
nationals, such that more than 60% of the Group's workforce in the country is
now local. ArmorGroup has had a local Iraqi partner for over three years and
has close relationships with the Iraqi community across the country, working
with their leaders to support local national employment and business
relationships. The Group believes its success in integrating Iraqi involvement
into its operations will bring benefits as Iraq moves towards security autonomy.

Elsewhere in the Middle East the Group's Bahrain operation continued to generate
good revenues from its US Navy contract while the businesses in Kuwait and the
UAE generated revenues for the first time. The Group continued to extend its
operations in the region with an exclusive agency agreement signed in Saudi
Arabia, as a first step to providing security consultancy in that country.


Asia

The division's revenues in Asia grew very strongly during the period to $35.9
million (2005: $17.3 million), primarily driven by the significant growth of the
Group's operation in Afghanistan. The Group's investment of $4 million in
developing its comprehensive and country-wide infrastructure in Afghanistan,
including Anjuman Base in Kabul which opened in July, has contributed to the
Group's strong market share in the country. The Group's competitive advantage,
with its teams now carrying out over 900 missions a month throughout Afghanistan
for a growing number of government and commercial clients, was underlined by the
re-award of its contract with the UK Government for the provision of static
guarding to its property in the country as well as mobile protection for its
officials.

In the Far East the appointment of the new Regional Director, based at the
Group's Tokyo office, has lead to increased and better targeted marketing
activity in the region. The team has been particularly successful in the
winning of Japanese Government aid work in the Middle East. The Group also took
the decision to close its small loss-making operations in Thailand and the
Philippines.


Africa

African revenues have increased by 29% to $29.6 million with continued strong
growth in Nigeria, where the security situation has become increasingly unstable
due to the activities of the Movement for the Emancipation of the Niger Delta in
the main oil and gas producing region of the country. The extractive industries
continue to make up the majority of the Group's clients in Africa, with
increasing revenues in the Democratic Republic of Congo and Tanzania. There was
a poor performance from the manned guarding business in Uganda and the Group
routinely reviews the contribution of its premium guarding business across the
continent. The Group has continued to extend its presence in Africa, in support
of clients' requests and for strategic reasons, and has opened new offices in
Algeria, Djibouti, Nigeria (Port Harcourt) and Sudan while establishing a
presence in Cote d'Ivoire, following the award of the contract to guard the US
Embassy in Abidjan.


North America

North American revenues declined to $5.2 million (2005: $5.8 million), primarily
due to the reduced support for reconstruction projects in Louisiana and
Mississippi following the hurricanes of 2005. The Group established ArmorGroup
Gulf Coast Inc. to service ongoing reconstruction work in the region and to
focus on future disaster recovery activities. It has already forged strong
relationships with Government agencies and commercial organisations in the area.
The Washington office continues to provide core management support for major
US Government initiatives. Through these activities, it is now well positioned
to develop an ongoing revenue stream on the US mainland.


South America

South American revenues increased by 29% to $21.0 million with good revenue
growth from new contract awards from its extensive oil and gas client base.
However, the region's margins were impacted due to government mandating of
salaries and terms and conditions in Venezuela and labour issues in Ecuador,
which were resolved towards the end of the year. The Group has continued to
extend its presence and its service offering in Latin America, opening its first
office in Brazil and winning the contract to guard the US Embassy in Quito,
Ecuador.


Eurasia

Eurasia, including the CIS, achieved strong growth with revenues up 26% to $13.3
million. The majority of the growth across the region was driven by integrated
security systems and due diligence consultancy services for international
corporations entering the Russian market and preferring ArmorGroup's
international solutions rather than those offered by local providers. The
business has also extended its geographic spread and client base, working with a
number of major international oil and gas companies in areas such as Khabarovsk,
in the Russian Far East, and Kazakhstan.


Security Training Division

Training revenues were down 24% to $18.3 million with the division recording an
operating loss, after charging its share of head office costs, of $1.5 million
for the year (2005: profit of $6.1 million).

The external utilisation of the Group's facility at Al Hillah in Iraq continues
to be severely reduced as a result of the slow down in coalition-funded training
of Iraqi security forces and the continued lack of funds for training from
Iraq's ministries. Nevertheless, the facility continues to provide significant
benefits to the Group's Iraq operation which uses it for the continuation
training of its convoy security teams as well as for pre-deployment training for
new employees.

The Group's training facilities in the US achieved strong utilisation over the
year, particularly West Point, Virginia benefiting from the Group's investment
in facilities and their primarily US Government client base. The Group has
continued to make further investment at both locations over the year, upgrading
their driving tracks and extending the training, maintenance and administrative
facilities at San Antonio, Texas.

There was a continued weak performance from the UK facility at Pershore as a
result of slow demand for specialist training from government and commercial
clients. However, a number of initiatives were introduced over the second half
to generate greater utilisation, including the development of a course to target
the Ministry of Defence's Contractors on Deployed Operations (CONDO) concept as
well as specialist driver training courses.

Phoenix CP Limited had an excellent first year within the Group. Its close
working relationship with Hazard Management Solutions, with which the Group
signed a teaming agreement in September, has lead to a number of contracts to
provide innovative training courses to specialist units of the US Department of
Defense and NATO.


Weapons Reduction & Mine Clearance Division

The Weapons Reduction & Mine Clearance division had a good year overall,
recovering from a weak first half to generate increased revenues of $10.6
million (2005: $8.4 million) and operating profits, after head office costs, up
101% to $0.5 million. The division won two major contracts which mobilised in
the second half: a $7 million mine survey and clearance programme in Southern
Sudan; and a $5.6 million battle area clearance programme in South Lebanon; as
well as a number of smaller projects in Albania, Azerbaijan and Laos as part of
the Weapons Reduction and Abatement Services contract. The division continued
to increase its reach and is now operating in Afghanistan following licensing
changes earlier in the year.


The changing market

The private security market continues to grow. Research company AMR
International estimates that ArmorGroup's addressable market grew 8% to $2.6
billion in 2006, with the majority of that growth coming from outside Iraq.
There has also been a noticeable change in the competitive landscape over the
year with a gravitation of the bigger contracts towards the larger international
security companies which have sufficient resources in management, finance and
infrastructure to be able to operate in the more hostile environments. The
changing environment in Iraq has led to some consolidation of the market as a
number of the Group's smaller competitors have now withdrawn from the country
altogether, giving rise to more opportunities. The larger Iraq-born companies
are seeking to expand into new geographic markets or develop new service lines,
with varying degrees of success.

Iraq is likely to remain a significant driver of growth for ArmorGroup for the
foreseeable future and the Group expects a number of different business streams
to develop over the short to medium term, including the following:


Back-loading of coalition military equipment out of Iraq;
Iraqi-funded reconstruction and development;
Training of Iraqi security forces; and
Development and modernisation of the Iraqi oil infrastructure.


The major drivers outside Iraq continue to be:

Growth of government outsourcing, from training to more complex
security services;
Spread of the oil and gas industry into the world's more hostile
areas in the search for more reserves; and
Growing awareness of companies' duty of care towards their
employees.


The Group's unrivalled competitive advantages of an extensive global footprint,
high quality employees, blue-chip client base, strong regulatory standards and
access to significant resources will continue to position it strongly in the
market.


Financial Review

Group revenues grew 17% to $273.5 million. Gross margins fell to 22% (2005:
24%) for the year as whole, largely as a result of the external
under-utilisation of the Camp Ghassan training facility in Iraq.

Administrative expenses increased 10% year on year to $49.1 million, evenly
split over the two halves of the year, with the increase primarily due to $0.8
million in legal, consultancy and insurance costs, $1 million on the
establishment of a Middle East management infrastructure, $1.2 million increased
cost base in Nigeria following the strong growth in revenues and $1.7 million of
additional overheads associated with Phoenix CP Limited, which was acquired in
November 2005. As reported in the interim results, a review of the Group's
overhead structure was undertaken which resulted in the closure of the Group's
loss-making offices in Thailand, Hong Kong, the Philippines and South Africa as
well as a reduction in central overheads in Iraq.

Operating profit was down to $10.6 million (2005: $12.4 million), as a result of
the $8.7 million adverse impact of the conclusion of the 2005 Iraqi training
contract partly offset by growth elsewhere, particularly from protective
security in the Middle East and Asia.

Interest charges increased to $1.1 million, compared to $0.3 million in 2005.
The charge also reflects the interest costs associated with the $18.1 million
(2005: $26.1 million) capital investment in the business over the year
including: the acquisition of over 200 vehicles, of which 57 were for Iraq,
primarily for convoy protection; the completion of Anjuman Base in Afghanistan;
and the improvement in the US training facilities. Capital expenditure will
continue to be aligned to the operational equipment required for new contract
awards. The Group's profit before tax was reduced to $9.6 million (2005: $12.1
million).

The Group's effective taxation rate during the period fell to 26% (2005: 30%)
which reflects the mix of jurisdictions where profits have been generated and
the Group's ability to utilise tax losses in the US, Nigeria and Kenya and the
release of provisions elsewhere. The tax rate in 2007 is not expected to exceed
this level. The Group's profit after tax fell by 16.4% to $7.1 million and
basic earnings per share to 13.4 cents (2005: 16.2 cents).

The Group achieved an excellent cash conversion rate of 289% with cash inflow
from operations rising to $30.7 million in 2006 (2005: $15.8 million) as a
result of a strong management focus on improving working capital. The Group's
net debt at 31 December 2006 was reduced to $3.6 million at the year end (2005:
$9.4 million). The Group now has a stronger balance sheet comprising US$14.6
million (2005: $12.3 million) of positive cash balances offset by bank
borrowings of US$18.2 million (2005: $21.7 million). Net assets at 31 December
2006 were US$82.9 million (2005: US$76.5million).

The Board will be recommending the payment of a final dividend of 1.5 pence on 2
July 2007 to shareholders on the register on 1 June 2007. Combined with the
interim dividend of 1.25 pence, which was paid in November 2006, this results in
a dividend for the year of 2.75 pence (2005: 2.75p), which is covered 2.5 times.



Outlook

The Group expects to see continuing growth in revenues from logistics support in
Iraq, driven by the factors noted above, as well as increasing reconstruction
activities stemming from Japan's soft loans to Iraq, much of which is expected
to be fully allocated by the end of 2007. There may also be increased business
opportunities in Iraq as the ministries prioritise tasks and release funding for
further reconstruction and training, although the timing and quantity of such
work remains unclear.

The market in Afghanistan is also expected to continue to grow in line with the
renewed Western commitment to the reconstruction and development of the country.
The Group's strong market share and comprehensive infrastructure should allow
it to benefit from any growth in the market.

The security issues that continue to affect the oil and gas industry in Nigeria
will drive that market and the Group has already extended its training and
consultancy offering in the country to pursue additional opportunities in the
run up to the April election. Elsewhere in Africa the Group will continue to
pursue opportunities offered by the extractive and construction industries.

Further opportunities are expected in South America and Eurasia, although the
Group expects the businesses in South America to continue to be hampered by
political uncertainties and will adjust its strategy accordingly.

The Group has sought to expand its consultancy services over the year and was
awarded consultancy contracts in Kuwait and Nigeria, both of which led to
further protective security work.

The Group's consultancy offering was strengthened in January 2007 by the
acquisition of Neil Young Associates (NYA), one of the world's leading
specialist kidnap and extortion consultancies, for a cash consideration of
250,000 and deferred consideration of 750,000 should specific profit targets
be achieved. With kidnapping, detention and extortion now amongst the fastest
growing crimes in the developing world and with few credible international
competitors the Board believes NYA will bring significant benefits to the Group
and its clients.

There will continue to be an emphasis on the development and rolling out of
further specialist training courses to the Group's extensive client list as well
as a focus on building regional training opportunities in the UK and overseas.

Revenues from the contract won by Weapons Reduction & Mine Clearance division in
2006 will feed through into 2007 and the team have recently won an extension of
its mine clearance contract in Cyprus.

The Board anticipates continuing strong market conditions over the year and
believes that the Group is well positioned to benefit from any market growth.
We have started the current year with a number of encouraging new contract wins
and a strong pipeline of identified opportunities, with new and existing
clients. As at 19 March 2007 the Group had $198.8 million of the year's
revenues already under contract (2006: $197 million).



ArmorGroup International plc
Consolidated income statement for the year ended 31 December 2006
Unaudited

Year ended Year ended
31 December 31 December
2006 2005
US$'000 US$'000

Turnover 3 273,453 233,150
Cost of sales (213,784) (176,158)

Gross profit 59,669 56,992

Administrative expenses (49,062) (44,587)

Operating profit 3 10,607 12,405

Interest receivable and similar income 4 157 168
Interest payable and similar charges 4 (1,209) (451)

Profit before tax 9,555 12,122

Income tax expense 6 (2,460) (3,632)

Profit for the year 7,095 8,490

Profit attributable to:
Equity shareholders 7,095 8,490

Earnings per share expressed in US cents per 1 pence share
- basic 8 13.35 16.24
- diluted 8 13.05 15.76


All amounts included above are derived from continuing operations.



ArmorGroup International plc
Consolidated balance sheet as at 31 December 2006
Unaudited

31 December 31 December
2006 2005
US$'000 US$'000
Non-current assets
Goodwill 21,317 20,355
Other intangible assets 810 726
Property, plant and equipment 30,870 28,784
Deferred tax assets 3,845 2,938

56,842 52,803
Current assets
Inventories 1,530 1,170
Trade and other receivables 54,033 53,114
Cash and cash equivalents 14,646 12,304

70,209 66,588

Total assets 127,051 119,391

Current liabilities
Borrowings (14,614) (14,953)
Trade and other payables (21,157) (17,412)
Current income tax liabilities (2,102) (2,489)
Provisions and other liabilities (134) (124)

(38,007) (34,978)

Net current assets 32,202 31,610

Total assets less current liabilities 89,044 84,413

Non-current liabilities
Borrowings (3,592) (6,783)
Provisions and other liabilities (131) (89)
Deferred tax liabilities (2,434) (1,058)

(6,157) (7,930)

Net assets 82,887 76,483

Shareholders' equity
Called up share capital 1,049 1,046
Share premium account 56,952 56,912
Capital redemption reserve 96 96
Merger reserve 1,273 1,273
Cumulative translation reserve 961 (178)
Retained earnings 22,556 17,334

Shareholders' equity 82,887 76,483




ArmorGroup International plc
Consolidated cash flow statement for the year ended 31 December 2006
Unaudited

Year ended Year ended
31 December 31 December
Note 2006 2005
US$'000 US$'000
Cash flows from operating activities
Cash inflow from operations 9 30,650 15,811
Interest received 157 168
Interest paid (1,271) (378)
Income tax paid (2,418) (4,693)

Net cash inflow from operating activities 27,118 10,908



Cash flows from investing activities
Purchase of businesses (net of cash acquired) (52) (5,890)
Deferred consideration received for disposal of business - 160
Purchase of property, plant and equipment (18,105) (26,123)
Purchase of intangible assets (524) (533)
Proceeds from sale of property, plant and equipment 122 115

Net cash outflow from investing activities (18,559) (32,271)


Cash flows from financing activities
Net proceeds from issue of ordinary share capital 43 132
Equity dividends paid to shareholders (2,754) (1,150)
New bank borrowings 3,460 22,677
Finance lease principle payments (43) (4)
Repayment of borrowings (6,986) (2,585)

Net cash (outflow)/inflow from financing activities (6,280) 19,070

Net increase/(decrease) in cash and cash equivalents 2,279 (2,293)

Cash and cash equivalents at beginning of year 12,279 14,566
Exchange gains on cash and bank overdrafts 36 6


Cash and cash equivalents at end of year 9 14,594 12,279






ArmorGroup International plc
Consolidated statement of changes in shareholders' equity for the year ended
31 December 2006
Unaudited


Cumulative
Share Capital trans-
Note Share premium redemption Merger lation Retained
capital account reserve reserve reserve earnings Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000

At 1 January 2005 1,027 56,784 96 - (49) 8,457 66,315

New shares issued on
acquisition 15 - - 1,273 - - 1,288
Share options
- Proceeds from shares
issued 4 128 - - - - 132
- Cost - - - - - 1,537 1,537
Currency translation
adjustments - - - - (129) - (129)
Profit for the year - - - - - 8,490 8,490
Dividends paid to equity
shareholders 7 - - - - - (1,150) (1,150)


At 31 December 2005 1,046 56,912 96 1,273 (178) 17,334 76,483

Share options
- Proceeds from shares issued 3 40 - - - - 43
- Cost - - - - - 881 881
Currency translation
adjustments - - - - 1,139 - 1,139
Profit for the year - - - - - 7,095 7,095
Dividends paid to equity
shareholders 7 - - - - - (2,754) (2,754)


At 31 December 2006 1,049 56,952 96 1,273 961 22,556 82,887




ArmorGroup International plc
Notes to financial information


1. Preliminary announcement

The preliminary financial information in this statement, which was approved by
the Board on 19 March 2007, is not audited and does not constitute statutory
accounts for the years ended 31 December 2006 or 31 December 2005 within the
meaning of Section 240 of the Companies Act 1985 (as amended). Financial
statements for ArmorGroup International plc for the year ended 31 December 2005
presented under IFRS have been delivered to the Registrar of Companies. The
auditors reported on those accounts: their report was unqualified and did not
contain a statement under either Section 237 (2) or Section 237 (3) of the
Companies Act 1985.

As at the date of this announcement the auditors have not reported on the
Group's financial statements for the year ended 31 December 2006, nor have such
financial statements been delivered to the Registrar of Companies. The
financial statements for the year ended 31 December 2006 will be distributed to
shareholders prior to, and filed with the Registrar of Companies following, the
Annual General Meeting.


2. Basis of preparation

The directors consider United States Dollars (US$) to be the Group's functional
currency. Accordingly, this financial information is presented in US$. At 31
December 2006 the closing exchange rate to sterling was 1/$1.958 (31 December
2005: 1/$1.720) and the average exchange rate to sterling for the year ended 31
December 2006 was 1/$1.8398 (31 December 2005: 1/$1.818).

The preparation of financial information in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results ultimately may differ
from those estimates.


3. Segmental reporting

a. Primary reporting format - business segment analysis

2006 2005
Turnover US$'000 US$'000

Protective security services 244,510 200,484
Security training 18,329 24,221
Weapons reduction and mine clearance 10,614 8,445

Turnover 273,453 233,150


Turnover in respect of protective security services includes recharges to third
party customers at cost or cost plus a handling fee of certain contract
expenses, including insurance, equipment, travel and out of pocket expenses of
US$3,476,000 for the year ended 31 December 2006 (2005: $8,317,000)


2006 2005
Segment result US$'000 US$'000

Protective security services before head office costs 20,345 13,467
Security training before head office costs (803) 6,967
Weapons reduction and mine clearance before head office costs 835 536
Head office costs (9,770) (8,565)

Protective security services including head office costs 11,610 6,102
Security training including head office costs (1,458) 6,077
Weapons reduction and mine clearance including head office costs 455 226

Operating profit 10,607 12,405

Net interest payable (1,052) (283)

Profit before tax 9,555 12,122

Income tax expense (2,460) (3,632)

Profit after tax 7,095 8,490



b. Secondary format - geographical segment analysis


The group manages its business segments on a global basis.

Revenue
2006 2005
US$'000 US$'000

Western Europe 10,174 3,100
Eastern Europe 13,939 10,805
South America 20,959 16,247
North America 14,914 16,062
Asia 36,636 18,471
Africa 35,413 25,552
Middle East 141,418 142,913

273,453 233,150



Geographical analysis is based on the region in which the services are
performed.



4. Net interest payable and similar charges
2006 2005
US$'000 US$'000

Interest payable on bank overdrafts and loans 1,201 450
Interest payable on finance leases 8 1

Total interest and similar charges payable 1,209 451
Interest receivable and other income (157) (168)

Net interest payable and similar charges 1,052 283




5. Acquisitions and Disposals


There were no acquisitions or disposals during the year ended 31 December 2006.

On 17 November 2005 the Group purchased 100% of the share capital of Phoenix CP
Ltd together with the property used by the business for a total consideration of
US$7,634,000. Phoenix CP Ltd provides resettlement training to UK military
personnel seeking a career in the private security sector, and provides
specialist training to the US Department of Defense and NATO personnel. The
acquisition was satisfied by US$6,346,000 in cash (inclusive of US$334,000 of
acquisition costs) and US$1,288,000 in shares resulting in provisional goodwill
of US$6,457,000 which is denominated in sterling.

From the date of acquisition to 31 December 2005 Phoenix CP Ltd contributed
US$222,000 to turnover, decreased profit before interest by US$49,000 and
decreased profit before taxation by US$55,000. Phoenix CP Ltd contributed
US$358,000 to the Group's net operating cash inflows, paid US$6,000 in respect
of interest, US$ nil in respect of taxation and utilised US$7,000 for capital
expenditure.


6. Income tax expense


Analysis of expense for the year 2006 2005
US$'000 US$'000
UK current tax
Corporation tax charge at 30% (2005: 30%) 1,792 -
Adjustment in respect of prior periods (16) 105
1,776 105
Foreign current tax
Corporation tax charge 670 3,824
Adjustment in respect of prior periods (455) (127)
215 3,697
Total current tax 1,991 3,802

UK deferred tax
Deferred tax charge 597 1,307
Adjustment in respect of prior periods 62 (487)
659 820
Foreign deferred tax
Deferred tax credit (115) (399)
Adjustments in respect of prior periods (75) (591)
(190) (990)
Total deferred tax 469 (170)

Income tax expense 2,460 3,632



The total income tax expense for the year is lower (2005: lower) than the
standard rate of corporation tax in the UK (30%). The differences are explained
below:

2006 2005
US$'000 US$'000

Profit before income tax 9,555 12,122

Profit multiplied by standard rate of corporation tax in the 2,867
UK of 30% (2005:30%)
3,637
Effects of:
Adjustments to tax in respect of prior periods (484) (1,100)
Adjustments in respect of foreign tax rates (1,946) (989)
Expenses not deductible for tax purposes 266 247
Depreciation in excess of capital allowances 13 7
Other timing differences (27) 132
Utilisation of losses (257) (47)
Unrelieved foreign tax credits 343 237
Unrelieved losses carried forward 262 524
Deferred tax on undistributed earnings 1,423 984

Income tax expense 2,460 3,632

7. Dividends


A final dividend of 1.50 pence per share will be recommended by the Board after
the balance sheet date and will be paid on 2 July 2007 to shareholders on the
register on 1 June 2007.


An interim dividend for 2006 of 1.25p per share, amounting to US$1,263,000, was
paid on 10 November 2006 to shareholders on the register on 29 September 2006.


A second interim dividend for 2005 of 1.5 pence per share, amounting to
US$1,491,000 was paid on 30 June 2006 to shareholders on the register on 2 June
2006.

An interim dividend for 2005 of 1.25 pence per share, amounting to US$1,150,000
was paid on 4 November 2005 to shareholders on the register on 23 September
2005.

8. Earnings per share

Basic


Basic earnings per share is calculated by dividing the earnings attributable to
equity holders of the Company by the weighted average number of ordinary shares
in issue during the year.

2006 2005

Profit attributable to equity holders of the Company (US$'000) 7,095 8,490
Weighted average number of ordinary shares 53,145,172 52,278,472
Basic earnings per share (US cents) 13.35 16.24


Diluted

Diluted earnings per share is calculated adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares. The Group has one class of dilutive potential ordinary shares:
those share options granted to employees where the exercise price is less than
the average market price of the Company's ordinary shares during the year.


2006 2005

Profit attributable to equity holders of the Company (US$'000) 7,095 8,490
Weighted average number of ordinary shares 53,145,172 52,278,472
Adjustment for dilutive potential of ordinary shares 1,202,826 1,582,655
Weighted average number of ordinary shares for diluted
earnings per share 54,347,998 53,861,127
Diluted earnings per share (US cents) 13.05 15.76

9. Reconciliation of profit after tax to net cash inflow from operating
activities

2006 2005
US$'000 US$'000

Profit after tax 7,095 8,490
Adjustments for:
Interest receivable (157) (168)
Interest payable 1,209 451
Taxation 2,460 3,632
Depreciation 14,871 10,654
Loss on disposal of property, plant and equipment 1,141 455
Amortisation of intangible assets 440 264
Compensation charge in respect of share based payments 881 1,537

27,940 25,315
Changes in working capital (excluding effects of acquisition
and disposal of subsidiaries)
Increase in inventories (360) (991)
Increase in trade and other receivables (768) (9,386)
Increase/ (decrease) in payables 3,786 845
Increase in provisions 52 28

Cash inflow from operations 30,650 15,811

Cash and bank overdrafts include the following for the purposes of the cash flow
statement:

2006 2005
US$'000 US$'000

Cash and cash equivalents 14,646 12,304
Bank overdrafts (52) (25)

14,594 12,279


10. Reconciliation of net cash flow to movement in net debt
2006 2005
US$'000 US$'000

Increase/(decrease) in cash in the year 2,279 (2,293)
Borrowings acquired with subsidiaries - (93)
Increase/(decrease) in other borrowings 3,569 (20,087)

Changes in net debt resulting from cash flows 5,848 (22,473)
Foreign exchange translation adjustments 24 6

Movement in net debt in the year 5,872 (22,467)
Net (debt)/cash at the beginning of the year (9,432) 13,035

Net debt at the end of the year (3,560) (9,432)


11. Reconciliation of movements in net debt


Group At 1 At 31
January Cash Non-cash Exchange December
2006 flow movements movement 2006
US$'000 US$'000 US$'000 US$'000 US$'000

Cash at bank and in hand 12,304 2,305 - 37 14,646
Overdrafts (25) (26) - (1) (52)

12,279 2,279 - 36 14,594

Bank and other borrowings due
within one year (14,890) 4,384 (4,003) - (14,509)
Bank and other borrowings due in
more than one year (6,733) (858) 4,003 - (3,588)
Finance leases (88) 43 - (12) (57)

(9,432) 5,848 - 24 (3,560)

Hefty results but worth a read

Really didnt expect a dividend so that a bonus and positives can be taken from the fact that the shares surged to 96p before falling back today/

Well done, GDP - a good pick on your part. I have been looking at this on and off and thought it was probably a loud "buy" when it was in the forties/fifties, but never got on board. I'm not surprised at today's profit-taking, given that the SP has as good as doubled in only a few months and that this stock deserves to be treated as a bit risky, but well done to those who took the risk I didn't and who made a profit in the process!

I should have brought at 70p but didn't have the cash then, I have cash now waiting to be re-invested and looking at four company's including Armor. Results were slightly ahead of ABN Amro forcast, and 2007 is looking very promising.

thanks soul - still think it looks good for 100p+ in 07.

well maybe tomorrow - another solid rise today 9%+.
Could be one of the star performers in 07.

Oddly enough the MoneyAm trades reports that an 85'000 share slae has just gone through - outweighing the entire buys so far today on its own.

Looks like Landsdowne have increased their stake

Wow

ArmorGroup International plc
02 April 2007



ArmorGroup International plc

Awarded US Embassy contract in Afghanistan





ArmorGroup International plc, the leading international provider of protective
security services, today announces that its subsidiary, ArmorGroup North
America, has been awarded the contract to provide guard services to the United
States Embassy in Kabul, Afghanistan. The contract, worth up to a total of $189
million, will run for up to five years from early April 2007 and will mobilise
over the next 90 days.



Under the terms of the contract ArmorGroup North America will provide the
following services:



Static guard services. Former Gurkha soldiers and Afghan guards
protecting personnel and assets based at the US Embassy and other facilities in
Kabul.

Life support services. Providing facilities support, such as catering
and laundry, for all personnel based at the US Embassy and other facilities in
Kabul.

Explosive Detection Dogs (EDD). Providing EDD and handlers for improved
access point and perimeter protection.



The substantial ArmorGroup team will work closely with representatives from the
US Government, the diplomatic mission in Kabul and the Afghan authorities.



ArmorGroup is one of the leading providers of defensive protective and security
consultancy services in Afghanistan and has been operating in the country since
2002. The Group already has over 600 highly qualified employees in Afghanistan,
carrying out over 900 missions a month, supporting a growing number of
commercial, governmental and NGO clients. The Group was also recently re-awarded
the $30 million annual contract to provide security services to UK Government
personnel and assets in Afghanistan.



ArmorGroup is a provider of security services to US and UK embassies and
facilities in countries such as Afghanistan, Bahrain, Cote d'Ivoire, Ecuador,
Jordan, Namibia, Nigeria, Rwanda and Uganda.



Dave Seaton, ArmorGroup's Chief Executive Officer, commented:



'We are tremendously pleased to have been awarded this important, long term
contract in a fast growing private security market. We have worked closely with
the US Government for many years, supporting and protecting their personnel and
facilities all over the world. Combined with our other major contract wins in
the country over the last few months, we are now one of the largest operators in
Afghanistan. We look forward to extending this position further as the market
continues to grow. '

$189 Million 5 year contract - this should help create a new level for the SP before the profit takers kick in.

And aside from that the contract is huge - mobilising in the next 90 days - Armor really could be 150p - 200p in the next year.

Think we'll see a big rise tomorrow

well it wasnt big but breaking 100p s got to have some pyschiolgical value !

All looks very positive from now on.

ArmorGroup International plc
10 April 2007



ArmorGroup International plc

Significant extension of UK Government contract in Afghanistan

ArmorGroup International plc, the leading international provider of protective
security services, today reports it has been awarded a $9.5 million extension in
the provision of security services it provides to the UK Government in
Afghanistan.


The initial contract, which the Group announced on 29 November 2006, was worth
around $30 million per annum, but due to additional requirements agreed during
the transitional process this contract has now been increased to $38.5 million
per annum.


ArmorGroup has also been awarded a $1 million contract to provide police mentors
and advisers in Helmand Province for at least eight months.


The main contract started on 1 January 2007 and ArmorGroup now provides the UK
Government with three distinct services in Afghanistan:


- Static guard services. Former Gurkha soldiers and Afghan guards protecting
personnel and assets at a number of sites including the British Embassy and
British Council Compound in Kabul.

- Mobile security services. Operationally experienced and SIA-accredited
Close Protection officers protecting UK Government employees as they move
around Afghanistan.

- Police mentoring services. Former British police officers will be
providing mentoring and consultancy services to the Afghan National Police.


ArmorGroup is the leading provider of defensive protective and security
consultancy services in Afghanistan and has been operating in the country since
2002. The Group currently has over 600 highly qualified employees in
Afghanistan, carrying out over 900 missions a month, supporting a growing number
of commercial, governmental and NGO clients.


Dave Seaton, Chief Executive Officer of ArmorGroup, commented:

'We are proud to be able to continue to support the UK Government in its
endeavour to redevelop Afghanistan. Our ability to rapidly extend our
activities in support of the UK Government in Afghanistan highlights the
benefits of our comprehensive infrastructure in the country and the strength of
our Human Resources and logistics functions in London. We anticipate further
opportunities presenting themselves following future international investment in
Afghanistan.'


For further enquiries please contact:


ArmorGroup International plc

Dave Seaton

Chief Executive Officer

Tel: +44 (0) 20 7808 5800

1 more contract to add to their already sizeable contract wins over the last year. 150 my new price target.

And another extension.

ArmorGroup wins 7 mln usd contract extension to train US defence dept
AFX


LONDON (Thomson Financial) - Defence services group ArmorGroup International PLC said it has won a 7 mln usd extension of its contract to provide specialist training to the United States Department of Defence (DoD).

The company said it won the contract in conjunction with Hazard Management Solutions Ltd, with whom it is working closely to develop a wide range of courses for specialist units.

ArmorGroup said these courses will include training on the growing threat of improvised explosive devices.

TFN.newsdesk@thomson.com

The annual report is also out on their website should you so desire to read it.