Final Results

Shires Income PLC
20 May 2004


20 May 2004

Shires Income plc
Preliminary Results for the year ended 31 March 2004

Shires Income plc 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.

                                                               2004        2003
Total assets less current liabilities                        £93.0m      £75.4m
Ordinary shareholders' funds                                 £68.1m      £51.2m

Net asset value (NAV) per ordinary share                     229.5p      172.7p
Ordinary share price                                         224.0p      141.5p

Discount (ordinary share price to NAV)                         2.4%       18.1%

Revenue return per ordinary share                            19.45p      19.72p
Dividends per ordinary share                                 19.25p      19.25p


   • The total return on net assets was 44.0%, which compared with a return
     of 31.0% on the FTSE All-Share Index, the Company's benchmark.

   • The proposed final dividend of 6.05p per ordinary share brings total
     dividends for the year to 19.25p, the same level as paid last year.

   • It is the Board's intention, in the absence of unforeseen circumstances,
     to maintain the dividend in respect of the year ending 31 March 2005.

   • Based upon the share price of 224p at 31 March 2004, the dividend yield
     was 8.6%, which compared with 3.1% on the FTSE All-Share Index.

   • Over the year the discount of share price to net asset value per share
     narrowed from 18.1% to 2.4%, as the stockmarket rating of the Company's
     shares improved.

   • Equity gearing was reduced from 25.5% at 31 March 2003 to 16.6% at 31
     March 2004, due principally to a rise in ordinary share prices.

   • Next year the progress of the economy and the stockmarket should be
     steady but unspectacular. The shares of companies with strong balance 
     sheets and healthy cash flows, which are well represented in the Company's
     portfolio, offer the best prospects of dividend growth and capital
     appreciation.


For further information please contact:

Iain Lynn, Investment Director / Susan Murray, Marketing Director
Glasgow Investment Managers
0141 572 2700


Shires Income plc
Annual Report 31 March 2004
Chairman's Statement


Highlights

I am pleased to report a significant improvement in the performance of your
Company in the year to 31 March 2004. Net assets grew by over £16.8 million over
the course of the year with the net asset value per share increasing from 172.7p
to 229.5p. The share price rose from 141.5p to 224.0p and, subject to
shareholder approval, total dividends will be maintained at the same level as
for the previous year (19.25p), producing a dividend yield of 8.6% based on the
share price at 31 March 2004.

As I mention below, it is the Board's intention, in the absence of unforeseen
circumstances, to maintain the dividend in respect of the year ending 31 March
2005.

Background

These results were achieved against the background of a recovery in the UK
stockmarket after the sharp declines recorded in the previous three years. The
end of the war in Iraq coupled with improving investor sentiment and robust
economic growth in the USA, Britain and Asia, especially China, were the main
factors underpinning the 31.0% total return on the FTSE All-Share Index, the
Company's benchmark.

Investment Returns

The total return on net assets was 44.0%, significantly ahead of benchmark. This
outperformance was mainly due to a strong rise in the prices of ordinary shares
held in the Company's portfolio and the positive impact of equity gearing.

Over the year the stockmarket rating of the Company's shares improved, the
discount narrowing from 18.1% to 2.4%. As a result the total return to a
shareholder, at 71.9%, was well above the return on net assets.

Portfolio Profile

Total gearing fell from 50.3% of net assets to 43.4%. Equity gearing was reduced
from 25.5% to 16.6%, due principally to a rise in ordinary share prices, while
fixed income gearing rose, from 24.8% to 26.8%; This reflects additional
investment during the year in the fixed income securities which make a major
contribution to achievement of the Company's income objective.

New hedging of the ordinary share portfolio was introduced to protect the net
asset value in the event of a significant downward movement in equity prices.

Earnings and Dividends

The Revenue Return per ordinary share was 19.45p, down slightly from 19.72p last
year. This reflects the lower value of equity investments in the portfolio after
the repayment of part of the RPI-linked borrowing last year, as that was
financed by the sale of some of the Company's holdings of ordinary shares.

The Board believes that the portfolio should provide sufficient income to
maintain the current level of dividend in the forthcoming year. The dividends
from ordinary shares are expected to rise again and the Company also enjoys
considerable flexibility in the management of its revenue account.

The Board is recommending a final dividend of 6.05p per ordinary share, bringing
total dividends for the year to 19.25p, the same level as paid last year. If
approved, the final dividend will be paid on 30 July 2004 to shareholders on the
register at close of business on 9 July 2004.

Outlook

Aggregate output in the UK may grow more slowly next year as interest rates rise
and constrain personal consumption. The pre-emptive increases in interest rates
already made by the Bank of England, however, should reduce the level of further
rises. The progress of both the economy and the stockmarket should be steady but
unspectacular, an environment in which the best prospects of dividend growth and
capital appreciation may be found among the shares of companies with strong
balance sheets and healthy cash flows, which are well represented in the
Company's portfolio.

Board

The Board was saddened to announce in the Interim Report the untimely death of
John Stubbs, who had been a member of the Board since 1985. John's investment
management experience and long involvement with the Company enabled him to
provide a much valued contribution to our discussions.

Following the deliberations of the Nominations Committee and the use of an
independent search company, David P. Kidd, Chief Investment Officer and Deputy
Managing Director of Chiswell Associates Limited, an investment management
company, joined in February 2004 and, as announced in the Interim Report, Mervyn
D. Couve, then Senior Partner in solicitors Speechly Bircham, was appointed in
October 2003. They bring to the Board skills complimentary to those already
available and come forward for election at the Annual General Meeting.

Annual Report and Annual General Meeting

The Annual Report will be mailed to shareholders on 24 May 2004. 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 25 June 2004 at 12 noon.


J Martin Haldane
Chairman


Shires Income plc
Consolidated Statement of Total Return
(incorporating the Revenue Account*)
for the year ended 31 March 2004
                                            2004                          2003
                      Revenue   Capital    Total   Revenue   Capital     Total
                         £000      £000     £000      £000      £000      £000

Gains/(Losses) on
investments                 -    18,065   18,065         -   (55,173)  (55,173)
Income                  7,392         -    7,392     7,542         -     7,542
Management and
administrative
expenses                 (566)     (186)    (752)     (591)     (236)     (827)
                     -----------------------------------------------------------
NET RETURN BEFORE
FINANCE
COSTS AND TAXATION      6,826    17,879   24,705     6,951   (55,409)  (48,458)
Finance costs of
borrowing              (1,084)   (1,084)  (2,168)   (1,202)   (2,367)   (3,569)
                     -----------------------------------------------------------
RETURN ON ORDINARY
ACTIVITIES BEFORE
TAXATION                5,742    16,795   22,537     5,749   (57,776)  (52,027)
Taxation                   30         -       30       106         -       106
                     -----------------------------------------------------------
Return on ordinary
activities after
taxation
for the financial
year                    5,772    16,795   22,567     5,855   (57,776)  (51,921)
Preference
dividend                   (2)        -       (2)       (2)        -        (2)
                     -----------------------------------------------------------
RETURN ATTRIBUTABLE
TO
EQUITY
SHAREHOLDERS            5,770    16,795   22,565     5,853   (57,776)  (51,923)
Dividends on
equity shares          (5,713)        -   (5,713)   (5,713)        -    (5,713)
                     -----------------------------------------------------------
Transfer TO/(From)
reserves                   57    16,795   16,852       140   (57,776)  (57,636)
                     -----------------------------------------------------------
Return per
ordinary share          19.45p    56.59p   76.04p    19.72p  (194.68)p (174.96)p
Dividends per
ordinary share          19.25p                       19.25p

* 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.

No 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 2004
and 2003 but is derived from those accounts. Statutory accounts for 2003 have
been delivered to the Registrar of Companies and those for 2004 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 2004
                                                            2004          2003
                                                            £000          £000
Fixed Assets
Ordinary Shares                                           74,536        60,318
Convertibles                                               6,970         6,083
Preference Shares                                         11,280         6,598
Portfolio Hedge Instruments                                1,414           923
Unlisted Investments                                       3,556         3,159
                                                     --------------------------
                                                          97,756        77,081
Current Assets
Debtors                                                    2,208         2,063
Dealing investments held by subsidiary undertakings          205           323
Cash at bank and in hand                                     732            45
                                                     --------------------------
                                                           3,145         2,431
Creditors
Amounts falling due within one year                       (7,856)       (4,106)
                                                     --------------------------
NET CURRENT LIABILITIES                                   (4,711)       (1,675)
                                                     --------------------------
Total Assets less current liabilities                     93,045        75,406
Creditors
Amounts falling due after more than one year             (24,897)      (24,110)
                                                     --------------------------
Net Assets                                                68,148        51,296
                                                     --------------------------
CAPITAL AND RESERVES
Called up share capital                                   14,888        14,888
Share premium account                                     19,039        19,091
Other capital reserves
Realised                                                  27,898        35,368
Unrealised                                                 2,268       (22,049)
Revenue reserves
Realised                                                   3,779         3,722
Unrealised                                                   276           276
SHAREHOLDERS' FUNDS
                                                     --------------------------
(including non-equity)                                    68,148        51,296
                                                     --------------------------
Net asset value per ordinary share                         229.5p        172.7p



Shires Income plc
Consolidated Cash Flow Statement
for the year ended 31 March 2004

                                             2004     2004      2003      2003
                                             £000     £000      £000      £000

Operating activities
Dividends and interest received
from investments                                     6,383               7,434
Deposit interest received                               83                 182
Dealing subsidiary receipts                          1,336                 472
Other cash received                                    589                  98
Other payments                                           -                (250)
Administrative expenses                               (662)               (831)
Payments to and on behalf of Directors                 (51)                (73)
Dealing subsidiary payments                           (690)                 (8)
                                                    --------            --------
Net cash inflow from operating activities            6,988               7,024
Servicing of finance
Interest paid                              (1,374)            (1,802)
Preference dividends paid                      (2)                (2)
                                          ---------          ---------

                                                    (1,376)             (1,804)
TAXATION
Consortium relief                                       98                  97

INVESTING ACTIVITIES
Purchases of investments                  (69,083)           (49,537)
Sales of investments                       70,784             83,653
Hedge instrument payments                  (2,570)           (24,396)
Hedge instrument receipts                     657             15,826
Net cash (outflow)/INFLOW from                        (212)             25,546
investing activities
Equity dividends paid                               (5,713)             (5,713)
                                                    --------            --------
NET CASH (OUTFLOW)/INFLOW
BEFORE FINANCING                                      (215)             25,150

Financing
Repayment of 3.4375% Index-Linked               -            (16,891)
Debenture
Debt due within one year
                                          ---------          ---------
increase/(decrease) in short-term           1,150             (9,500)
borrowings                                ---------          ---------

                                                     1,150             (26,391)
                                                    --------            --------
INCREASE/(Decrease) in cash                            935              (1,241)
                                                    --------            --------


                      This information is provided by RNS
            The company news service from the London Stock Exchange