Amendment to Interim Results

Shires Income PLC 27 November 2006 This is a replacement to the announcement 5334M released at 07.00 am this morning. The dividend payment date has been changed. News Release 27 November 2006 Shires Income plc Interim Results for the Six months to 30 September 2006 Shires Income plc aims to provide a high level of income together with growth of both income and capital from a portfolio substantially invested in UK Equities. 30 September 31 March 2006 2006 Total investments Â£127.0m Â£131.7m Ordinary Shareholders' funds Â£93.5m Â£97.5m Net asset value 315.0p 328.4p Share price 306.0p 313.5p Premium/(Discount) (share price to adjusted net asset value)^ 0.5% (1.4%) Revenue return per ordinary share 10.3p 9.2p* Dividends per ordinary share 10.45p 10.45p* ^ Excluding IFRS Dividend adjustment of 10.45p * Half year to 30 September 2005 â€¢The yield on the company's ordinary shares was 6.3% at the closing price of 306.0p on 30 September 2006. This compared to a yield on the FTSE All-Share Index of 3.1%. â€¢The Total return on net assets for the period was -0.6%. The total return to shareholders was higher at 1.0%. The total return on the FTSE All-Share Index, the Company's benchmark, was 1.7%. â€¢The rating of the Company's shares improved in the six month period, moving from a discount of 1.4% to a premium of 0.5% at 30 September 2006. â€¢The improvement in the rating allowed the Company to issue 13,675 ordinary shares in the six month period. A further 6,923 ordinary shares were issued in October. These were the first shares issued since September 2001. â€¢A second interim dividend of 4.4p has been declared for payment on 31 January 2007 to shareholders on the Register at close on 5 January 2007. Dividends paid and declared to date total 8.8p, the same level as last year. For further information, please contact:- Mike Balfour, Kenneth Harper Chief Executive, Glasgow Investment Managers, 0141 572 2700 Chairman's Statement Background The UK stockmarket was fairly volatile in the six months to 30 September 2006, although it ended the period almost unchanged. The FTSE All-Share Index, the Company's benchmark, returned 1.7% on a total return basis as corporate earnings continued to improve, although fears of higher interest rates in both the UK and abroad were a restraining factor. Investment Returns The total return on net assets of your Company over the six months to 30 September 2006 was -0.6%, which was below the return on the Company's benchmark. The equity portfolio performed well in the period, but this good performance was more than offset by the decline in value of the preference and convertible securities held in the portfolio due to the rise in UK interest rates. The total return to shareholders, or share price total return, at 1.0%, was higher than the return on net assets, reflecting the fact that the discount of 1.4%, at which the share price stood to the net asset value per share at 31 March 2006, moved to a premium of 0.5% at 30 September 2006. Earnings and Dividends The revenue return per share was 10.3p for the six months to 30 September 2006. Actual dividends paid to date for the 2006/07 financial year amount to 4.4p, comprising the first interim dividend payment, made on 31 October 2006. A second interim dividend of 4.4p has been declared for payment on 31 January 2007 to shareholders on the Register at close of business on 5 January 2007. As explained in previous reports, under IFRS only dividends paid in the period are included in the financial statements. As a result, the total dividend reflected in these accounts and shown in the financial highlights is 10.45p, comprising the third interim dividend from the 2005/2006 financial year of 4.4p paid on 28 April 2006 and the final dividend in respect of 2005/2006 of 6.05p paid on 31 July 2006. Portfolio Profile The distribution of assets shows that total gearing rose slightly in the six months to September 2006 from 35.1% to 35.8%. Equity gearing also rose from 3.9% to 4.3% as a result of the equity portfolio performing better than the fixed interest portfolio in the period. The majority of the gearing continues to be invested in fixed interest investments which helps maintain the high level of income distributed to shareholders. International Financial Reporting Standards (IFRS) As detailed in the 2006 Annual Report, Shires Income plc increased its holding in the Mackintosh High Income OEIC on 4 April 2006 to over 50% of that fund. Under IFRS Shires Income plc is deemed to be controlling the OEIC and is required to consolidate the full value of the OEIC into these financial statements. This has resulted in the net asset value of the Company being Â£2,878,000 higher than if the OEIC had been accounted for as a normal investment. This figure is the minority interest shown in the balance sheet, and represents the value of the OEIC not owned by the Company. It should be noted that all performance figures, calculation of premium/ discounts and gearing figures quoted in this report exclude this uplift in net asset value. The OEIC has been deemed as being held for sale, as it is the Board's intention that the Company will not hold more than 50% of the units in issue as at 31 March 2007. Share Capital For the first time since September 2001, the Company was able to issue shares. On 2 August 2006, 13,675 shares were issued at a price of 300.2p under the blocklisting facility. This price represented a premium of 2.4% to the underlying net asset value. On 18 October 2006 a further 6,923 shares were issued under the blocklisting at a premium of 3.3% to the underlying net asset value. The fact that the Company has been able to issue these shares underlines the current strong rating of the Company's shares in the stockmarket. Outlook Short-term interest rates were increased by 25 basis points to 4.75% in August, and further increased to 5.0% in November. The Bank of England Monetary Policy Committee has responded to the rise in consumer price inflation, which is presently above its 2% target. The rise in inflation has mainly come from energy prices, with core inflation remaining at a subdued level, indicating future rises in interest rates should not be significant. Equity share prices and valuations are strongly influenced by the growth in companies' earnings and dividends. If the consensus GDP forecast of 2.4% for 2007 is achieved, further real growth in earnings and dividends can be expected over the next year. Consensus forecasts currently project growth in earnings per share of 6.5% in 2007, with dividends forecast to increase by 7.5% over the same period. These rates of growth are attractive in a low inflation, low interest rate environment and should mean equities, at current valuation levels, continue to offer the prospect of reasonable returns. The Interim Report will be mailed to shareholders on 1 December 2006. Copies may be obtained from the Managers, Glasgow Investment Managers Limited, Sutherland House, 149 St Vincent Street, Glasgow G2 5DR after that date. J Martin Haldane Chairman Consolidated Income Statement for the half year ended 30 September 2006 Half year to 30 September 2006 (unaudited) Revenue Capital Total Â£000 Â£000 Â£000 Gains Gains on investments at fair value - (414) (414) Revenue Dividend income 3,502 - 3,502 Interest income 140 (51) 89 Traded Option premiums 434 - 434 Deposit interest 19 - 19 Other revenue 2 - 2 Net loss of dealing subsidiary (43) - (43) --------- -------- -------- 4,054 (465) 3,589 --------- -------- -------- Expenses Investment management fee (131) (131) (262) Other administrative expenses (150) - (150) Finance cost of borrowings (602) (628) (1,230) --------- -------- -------- (883) (759) (1,642) --------- -------- -------- Profit before tax 3,171 (1,224) 1,947 Tax expense - - - --------- -------- -------- Profit for the period 3,171 (1,224) 1,947 --------- -------- -------- Profit attributable to equity holders of the Company 3,064 (3,995) (931) Minority Interest 107 2,771 2,878 --------- -------- -------- 3,171 (1,224) 1,947 Earnings per ordinary share excluding Minority Interest (pence) (3.1p) Including Minority Interest 6.6p The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items shown in the above statement derive from continuing operations. Consolidated Income Statement (Continued) Half year to 30 September Year to 31 March 2006 2005 (unaudited) (audited) Revenue Capital Total Revenue Capital Total Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Gains Gains on investments at fair value - 5,788 5,788 - 18,088 18,088 Revenue Dividend income 3,178 - 3,178 6,282 - 6,282 Interest income 37 - 37 123 (102) 21 Traded Option premiums 518 - 518 1,138 - 1,138 Deposit interest 4 - 4 15 - 15 Other revenue 2 - 2 10 - 10 Net loss of dealing subsidiary (89) - (89) 173 - 173 ------- ------- ------- ------- ------- ------- 3,650 5,788 9,438 7,741 17,986 25,727 ------- ------- ------- ------- ------- ------- Expenses Investment management fee (116) (116) (232) (246) (246) (492) Other administrative expenses (198) - (198) (409) - (409) Finance cost of borrowings (618) (644) (1,262) (1,294) (1,345) (2,639) ------- ------- ------- ------- ------- ------- (932) (760) (1,692) (1,949) (1,591) (3,540) ------- ------- ------- ------- ------- ------- Profit before tax 2,718 5,028 7,746 5,792 16,395 22,187 Tax expense - - - - - - ------- ------- ------- ------- ------- ------- Profit for the period 2,718 5,028 7,746 5,792 16,395 22,187 ------- ------- ------- ------- ------- ------- Profit attributable to equity holders of the Company 2,718 5,028 7,746 5,792 16,395 22,187 Minority Interest - - - - - - ------- ------- ------- ------- ------- ------- 2,718 5,028 7,746 5,792 16,395 22,187 ------- ------- ------- ------- ------- ------- Earnings per ordinary share excluding Minority Interest (pence) 26.1p 74.75p Including Minority - - Interest Group Balance Sheet as at 30 September 2006 30 September 31 March 30 September 2006 2005 2006 (unaudited) Â£000 Â£000 Â£000 Non current assets Ordinary shares 84,418 90,493 86,666 Convertibles 4,278 6,955 6,262 Other fixed interest 29,508 30,406 24,526 Hedge Instruments 442 362 505 Unlisted Investments 3,550 3,498 2,910 ---------- ---------- ---------- 122,196 131,714 120,869 ---------- ---------- ---------- Current assets Trade and other receivables 959 30 98 Accrued income and prepayments 1,538 1,614 1,298 Financial assets of dealing subsidiary 348 501 371 Cash and cash equivalents 99 1,212 50 Assets Held for Sale 12,615 - - ---------- ---------- ---------- 15,559 3,357 1,817 ---------- ---------- ---------- Current liabilities Trade and other payables (1,431) (733) (442) Short-term borrowings (8,263) (10,315) (9,060) Hedge Instruments - - (1,323) Liabilities held for Sale (4,889) - - ---------- ---------- ---------- (14,583) (11,048) (10,825) ---------- ---------- ---------- Non current liabilities Index Linked Debenture Stock (26,762) (26,499) (26,012) ---------- ---------- ---------- (26,762) (26,499) (26,012) ---------- ---------- ---------- Net assets 96,410 97,524 85,849 ---------- ---------- ---------- Issued capital and reserves attributable to equity holders of the parent Called up share capital 14,895 14,888 14,888 Share premium account 18,944 18,936 18,961 Realised capital reserve 35,658 32,667 24,485 Unrealised capital reserve 16,655 23,615 20,861 Revenue reserve 7,380 7,418 6,654 ---------- ---------- ---------- Shareholders Equity (excl. Minority Interests) 93,532 97,524 85,849 Minority Interests 2,878 - - ---------- ---------- ---------- Total Shareholders Equity 96,410 97,524 85,849 ---------- ---------- ---------- Net asset value per ordinary share (pence) - excluding minority interest 315.0p 328.4p 289.1p - Including minority interest 324.7p - - Note:. The financial information contained within this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2006 has been extracted from the statutory accounts and restated as disclosed in note 2 in the financial statements. Those accounts have been filed with the Registrar of Companies and contain an unqualified Auditors' and do not contain a statement under Section 237(2) or (3) of the Companies Act 1985. Consolidated Cash Flow Statement for the half year ended 30 September 2006 Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) Â£000 Â£000 Â£000 Cash flows from operating activities Investment income received 3,631 3,833 6,550 Deposit interest received - 3 12 Investment management fee paid (268) (241) (506) Sales less purchases of current financial assets held for trading 110 535 667 Other cash receipts 528 469 1,099 Other cash expenses (240) (211) (332) ---------- ---------- ---------- Cash generated from operations 3,761 4,388 7,490 Interest paid (955) (962) (1,854) Taxation - - - ---------- ---------- ---------- Net cash inflows from operating activities 2,806 3,426 5,636 ---------- ---------- ---------- Cash flows from investing activities Purchases of investments (15,076) (21,367) (55,325) Sales of investments 16,269 24,405 60,125 Net cash (outflow) / inflow for hedge instruments - (1,271) (2,722) ---------- ---------- ---------- 1,193 1,767 2,078 ---------- ---------- ---------- Cash flows from financing activities Proceeds of Share Issues 41 - - Equity dividends paid (3,101) (3,101) (5,715) ---------- ---------- ---------- Net increase /(decrease) in cash and cash equivalents 939 2,092 1,999 ---------- ---------- ---------- Cash and cash equivalents at start of period (9,103) (11,102) (11,102) ---------- ---------- ---------- Cash and cash equivalents at end of period (8,164) (9,010) (9,103) ---------- ---------- ---------- Cash and cash equivalents comprise: Cash and cash equivalents 99 50 1,212 Short-term borrowings (8,263) (9,060) (10,315) ---------- ---------- ---------- (8,164) (9,010) (9,103) ---------- ---------- ---------- Consolidated Statement of Changes in Equity For the half year ended 30 September 2006 Share Share Premium Realised Unrealised Retained Minority Total Capital Reserve Capital Reserve Revenue Reserve Capital Interest Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 As at 31 March 14,888 18,936 32,667 23,615 7,418 - 97,524 2006 ------- -------- -------- -------- -------- ------- ------- Revenue for - - - - 3,064 107 3,171 the period Capital profits for - (26) 2,991 (6,960) - 2,771 (1,224) the period Equity dividends (3,102) - (3,102) Issue of Share 7 34 - - - - 41 Capital ------- -------- -------- -------- -------- ------- ------- As at 30 September 14,895 18,944 35,658 16,655 7,380 2,878 96,410 2006 ------- -------- -------- -------- -------- ------- ------- Note 1: The assets held for sale and the liabilities held for sale shown in the Balance sheet represent the total assets and liabilities of the Mackintosh High Income OEIC as at 30 September 2006. The Minority Interest represents the value of the units in the Mackintosh High Income OEIC not held by Shires Income plc. As at 30 September 2006, Shires Income plc held 4,989,011 units of the OEIC, representing 62.8% of the number of units in issue. Distribution of Assets Valuation at Purchases Sales Appreciation/ Valuation at 31 March 2006 (Depreciation) 30 September 2006 (unaudited) Â£000 % Â£000 Â£000 Â£000 Â£000 % Listed investments Ordinary 90,493 92.8 13,531 (14,114) (644) 89,266 95.4 shares Convertibles 6,955 7.1 - (1,207) (1,470) 4,278 4.6 Other fixed interest 30,406 31.2 2,208 (1,907) (1,199) 29,508 31.5 Hedging Instruments 362 0.4 - - 80 442 0.5 ------- ------ -------- ------- --------- ------- ------ 128,216 131.5 15,739 (17,228) (3,233) 123,494 132.0 Unlisted Investments 3,498 3.6 - - 52 3,550 3.8 ------- ------ -------- ------- --------- ------- ------ 131,714 135.1 (3,181) 127,044 135.8 Other Current 3,357 3.4 2,944 3.1 assets Other Current (11,048) (11.3) (9,694) (10.3) liabilities Non current liabilities (26,499) (27.2) (26,762) (28.6) ------- ------ ------- ------ Net assets (excl Minority 97,524 100.0 93,532 100.0 Interest) ------- ------ ------- ------ Net asset 328.4p 315.0p value per ordinary share This information is provided by RNS The company news service from the London Stock Exchange

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