Final Results

Shires Income PLC
23 May 2002


News Release


23 May 2002


Shires Income plc

Preliminary Results for the year ended 31 March 2002

Shires Income plc with total assets £148.1 million aims to provide for
shareholders a high level of income together with growth of both income and
capital from a portfolio substantially invested in UK Equities.

                                                                   2002                       2001


Total assets less current liabilities                             £148.1m                    £164.6m
Ordinary shareholders' funds                                      £108.9m                    £126.0m
Net asset value per ordinary share                                 366.9p                     425.1p
Ordinary share price                                               332.5p                     413.0p
Discount                                                             9.4%                       2.8%
Revenue return per ordinary share                                  19.35p                     19.27p
Dividends per ordinary share                                       19.25p                     19.00p



•         Proposed final dividend of 6.05p per ordinary share bringing total
dividends for the year to 19.25p which represents a rise of 1.3% over the last
year's payment of 19.00p.



•         The dividend yield at 31 March 2002 was 5.8% which compared with 2.7%
on the All-Share Index.



•         The total return on net assets was -9.2%, which compared with the
return of -3.2% on the FTSE All-Share Index, the Company's benchmark.  The
portfolio underperformed the benchmark in the first half of the year but
outperformed in the second half.



•         Over the five years to 31 March 2002, the total return on net assets
was 44.3% or 7.6% per annum, which compares with 38.4% or 6.7% on the All-Share
Index, while dividends paid to shareholders grew by 2.8% per annum.



•         Total gearing rose from 37.1% to 43.7% of net assets in the course of 
the year, due partly to stockmarket weakness and partly to investment activity,
while total debt outstanding rose by only £0.8 million.



•         Despite the flow of better economic news since the beginning of 2002,
stockmarkets have made little progress.  Yields remain higher than they would be
if stockmarkets were to respond more readily to the developing upturn in
economics and attractive investment opportunities continue to be identified.




For further information please contact:

David Williams, Managing Director

Glasgow Investment Managers

0141 572 2700



Shires Income plc

Annual Report 31 March 2002

Chairman's Statement



Background

In the first half of the Company's financial year stockmarkets fell as signs of
recession developed and were then exacerbated by the terrorist attacks in the
USA in September. The second half, however, witnessed a gradual but uncertain
recovery as the publication of encouraging economic statistics alternated with
announcements of disappointing company news.



Investment Returns

The total return on net assets was -9.2%, which compared with the return of
-3.2% on the FTSE All-Share Index.



The principal contribution to this underperformance came in the first half of
the Company's year.  The UK equity portfolio, structured to benefit from
economic recovery, performed badly in the aftermath of the events of September
11 and the valuation of the holding in Glasgow Investment Managers was reduced,
reflecting lower ratings of similar companies listed on the stockmarket.  In the
second half the return on net assets was ahead of the FTSE All-Share benchmark,
with a good performance from the UK equity portfolio partly offset by the cost
of closing and neutralising hedge positions established in the third quarter of
2001.



In a year when net asset values fell the Company's gearing had a significant
negative impact.



The total return to a shareholder was -14.8%, as the discount of share price to
net asset value per share rose to 9.4% at 31 March 2002 from 2.8% last year.



Earnings and Dividends

The Revenue Return per ordinary share was 19.35p, which compares with 19.27p
last year.  An increase in dividend income from listed investments was largely
offset by lower dividends from Glasgow Investment Managers and higher interest
costs as short-term borrowing was raised from time to time during the year.



The Board is recommending a final dividend of 6.05p per ordinary share, bringing
total ordinary dividends for the year to 19.25p, a rise of 1.3% over the 19.00p
paid last year.  If approved, the final dividend will be paid on 31 July 2002 to
shareholders on the register at close of business on 5 July 2002.



Portfolio Profile

Total gearing rose from 37.1% to 43.7% of net assets in the course of the year,
due partly to stockmarket weakness and partly to investment activity, while
total debt outstanding rose by only £0.8 million.



At 31 March 2002 the exposure to ordinary shares was 122.2% of net assets,
compared with a figure of 116.6% a year earlier.  Some new purchases raised the
investment in convertible securities to 11.2% from 8.0% of net assets.



In August 2001 the Board decided to introduce hedging to the Company's ordinary
share portfolio to limit any possible major rise in gearing and the attendant
erosion of net assets which could result from significant general weakness of
share prices.  After the UK stockmarket began to recover some positions were
closed and the remainder neutralised, realising a small overall loss from the
hedging activity.



Longer Term

In the recent period of stockmarket turbulence and uncertainty the Company has
continued to pursue an investment strategy intended to provide shareholders with
a high level of income together with growth in both capital and dividends.  Over
the five years to 31 March 2002, the total return on net assets was 44.3% or
7.6% per annum, which compares with 38.4% or 6.7% on the All-Share Index.  Over
the same period dividends paid to shareholders grew by 2.8% per annum.  At 31
March 2002 the historic yield was 5.8%, compared with 2.7% on the All-Share
Index.



Board

The Board welcomed Hamish Buchan, a well known and respected commentator on the
investment trust industry for many years, who became a director of the Company
after the Annual General Meeting in June 2001.



John Harrison, a director of the Company since 1995, died suddenly in July 2001
and his contribution to our deliberations is sadly missed.



Outlook

Despite the flow of better economic news since the beginning of 2002
stockmarkets made little progress in the first quarter of the year, perhaps
because events in the Middle East have given rise to concern about the possible
impact on the oil price, perhaps because investors are not yet convinced that
the outlook for corporate profits has improved.  In this climate of uncertainty
yields remain higher than they would be if stockmarkets were to respond more
readily to the developing upturn in economies and attractive investment
opportunities continue to be identified.



Annual Report and Annual General Meeting

The Annual Report will be mailed to shareholders on 28 May 2002.  Copies may be
obtained from the managers, Glasgow Investment Managers Limited, Sutherland
House, 149 St Vincent Street, Glasgow G2 5DR after that date.



The Annual General Meeting will be held at Trinity House, Tower Hill, London
EC3N 4DH on 27 June 2002 at 12 noon.



AJR Izat

Chairman




Shires Income plc

Consolidated Statement of Total Return
(incorporating the Revenue Account*)
for the year ended 31 March 2002
                                                                        2002                               2001
                                             Revenue     Capital       Total  Revenue   Capital    Total
                                                £000        £000        £000     £000      £000     £000

Gains/(Losses) on investments                      -    (16,046)    (16,046)        -   (6,529)  (6,529)
Income                                         8,246           -       8,246    8,040         -    8,040
Management and administrative
  expenses                                     (618)       (309)       (927)    (675)     (322)    (997)

NET RETURN BEFORE FINANCE
  COSTS AND TAXATION                           7,628    (16,355)     (8,727)    7,365   (6,851)    (514)

Part disposal of subsidiary undertaking            -           -           -        -      (82)     (82)

Finance costs of borrowing                   (1,975)       (937)     (2,912)  (1,779)   (1,368)  (3,147)

RETURN ON ORDINARY
  ACTIVITIES BEFORE TAXATION                   5,653    (17,292)    (11,639)    5,586   (8,301)  (2,715)

Taxation                                        (88)           -        (88)    (129)         -    (129)

RETURN ON ORDINARY
  ACTIVITIES AFTER TAXATION
  FOR THE FINANCIAL YEAR                       5,741    (17,292)    (11,551)    5,715   (8,301)  (2,586)

Preference dividend                                2           -           2        2         -        2

RETURN ATTRIBUTABLE TO
  EQUITY SHAREHOLDERS                          5,739    (17,292)    (11,553)    5,713   (8,301)  (2,588)

Dividends on equity shares                     5,713           -       5,713    5,633         -    5,633

TRANSFER TO/(FROM)
  RESERVES                                        26    (17,292)    (17,266)       80   (8,301)  (8,221)

Return per ordinary share                     19.35p    (58.29)p    (38.94)p   19.27p  (28.00)p  (8.73)p
Dividends per ordinary share                  19.25p                           19.00p



* The revenue column of this statement is the consolidated profit and loss
account of the Group



All revenue and capital items in the above statement derive from continuing
operations with the exception of the capital loss on part disposal of a former
subsidiary undertaking.



No other operations were acquired or discontinued during the year.



The financial information set out above and on the following pages does not
constitute the Company's statutory accounts for the years ended 31 March 2002
and 2001 but is derived from those accounts.  Statutory accounts for 2001 have
been delivered to the Registrar of Companies and those for 2002 will be
delivered following the Company's Annual General Meeting.  The auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under Section 237(2) or (3) of the Companies Act 1985.




Shires Income plc

Group Balance Sheet

as at 31 March 2002
                                                                            2002                       2001
                                                                            £000                       £000
FIXED ASSETS
Ordinary shares                                                          133,062                    146,991
Convertibles                                                              12,162                     10,120
Other fixed interest                                                       8,019                      7,850
Hedge instruments                                                        (3,448)                          -
Unlisted investments                                                       6,770                      7,947
                                                                         156,565                    172,908
CURRENT ASSETS
Debtors                                                                    3,692                      2,308
Dealing investments held by subsidiary undertaking                           473                        478
Cash at bank and in hand                                                   1,038                        151
                                                                           5,203                      2,937
CREDITORS
Amounts falling due within one year                                       13,626                     11,247
NET CURRENT LIABILITIES                                                  (8,423)                    (8,310)
TOTAL ASSETS LESS CURRENT LIABILITIES                                    148,142                    164,598
CREDITORS
Amounts falling due after more than one year                              39,210                     38,517
NET ASSETS                                                               108,932                    126,081
CAPITAL AND RESERVES
Called up share capital                                                   14,888                     14,874
Share premium account                                                     20,317                     20,276
Other capital reserves
  Realised                                                                71,895                     70,004
  Unrealised                                                             (2,026)                     17,095
Revenue reserves
  Realised                                                                 3,582                      3,556
  Unrealised                                                                 276                        276
SHAREHOLDERS' FUNDS
(including non-equity)                                                   108,932                    126,081
Net asset value per ordinary share                                        366.9p                     425.1p








Shires Income plc

Consolidated Cash Flow Statement

for the year ended 31 March 2002

                                                           2002          2002           2001          2001
                                                           £000          £000           £000          £000

OPERATING ACTIVITIES

Dividends and interest received

  from investments                                                      7,569                        6,804

Income tax recovered                                                       50                           68

Interest received                                                          47                           79

Investment dealing receipts                                               147                          470

Other cash received                                                       595                          842

Payments to and on behalf of Directors                                   (59)                         (55)

Investment dealing payments                                             (458)                        (542)

Other cash payments                                                     (531)                      (1,294)

NET CASH INFLOW FROM OPERATING ACTIVITIES                               7,360                        6,372

SERVICING OF FINANCE

Interest paid                                           (2,211)                      (1,518)

Payments of income tax                                    (172)                        (311)

Preference dividends paid                                   (2)                          (2)

                                                                      (2,385)                      (1,831)

TAXATION

Group relief                                                  -                          341

Consortium relief                                           129                          110

                                                                          129                          451

CAPITAL EXPENDITURE

Purchases of investments                               (58,289)                     (45,251)

Sales of investments                                     56,023                       41,297

Hedge instrument payments                              (12,963)                            -

Hedge instrument receipts                                12,740                            -

NET CASH OUTFLOW FROM INVESTING ACTIVITIES                            (2,489)                      (3,954)

ACQUISITIONS AND DISPOSALS

Net cash disposed of with subsidiaries                                      -                      (2,224)

EQUITY DIVIDENDS PAID                                                 (5,666)                      (5,559)

NET CASH OUTFLOW BEFORE
  FINANCING                                                           (3,051)                      (6,745)

FINANCING

Issues of shares                                            117                            -

Further expenses of issue of

  Index-Linked Debenture                                      -                         (27)

Debt due within one year

 - increase in short-term borrowings                      5,500                        2,490

                                                                        5,617                        2,463

INCREASE/(DECREASE) IN CASH                                             2,566                      (4,282)



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