Final Results

Shires Income PLC
20 May 2005


News Release


20 May 2005

Shires Income plc
Preliminary Results for the year ended 31 March 2005

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.

                                                               2005       2004
Total assets less current liabilities                        £103.7m     £93.0m
Ordinary shareholders' funds                                  £78.0m     £68.1m

Net asset value (NAV) per ordinary share                      262.7p     229.5p
Ordinary share price                                          266.0p     224.0p

Premium/(Discount) (ordinary share price to NAV)                1.3%      (2.4%)

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

Gearing                                                        48.2%      43.4%

   • The total return on net assets was 24.0%, which compared with a return
    of 15.6% 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.


   •Based upon the share price of 266p at 31 March 2005, the dividend yield
    was 7.2%, which compared with 3.1% on the FTSE All-Share Index.


   •Over the year there was an improvement in the rating of the Company's
    shares in the stockmarket. The share price moved from a discount of 2.4% to
    net asset value per share at 31 March 2004 to a premium of 1.3% at 31 March
    2005.


   • Equity gearing was reduced from 26.8% at 31 March 2004 to 19.0% at 31
    March 2005, due principally to a rise in ordinary share prices.


For further information please contact:

Mike Balfour, Chief Executive
Glasgow Investment Managers
0141 572 2700

Shires Income plc

Annual Report 31 March 2005

Chairman's Statement

Highlights
I am pleased to report another good year for your Company. Net assets in the
year to 31 March 2005 rose by over £9.8 million equating to an increase of
14.5%, from 229.5p per ordinary share to 262.7p per ordinary share. The share
price rose 18.7%, from 224.0p to 266.0p, standing at a premium to net asset
value of 1.3% at 31 March 2005. Subject to shareholder approval, total dividends
will be maintained at 19.25p, producing a dividend yield of 7.2% based upon the
share price at 31 March 2005.

Background
These results were achieved against the background of continued recovery on the
UK stockmarket with the FTSE All-Share Index, the Company's benchmark, returning
11.9% on a capital basis and 15.6% on a total return basis.

Investment Returns
The Company's total return on net assets was 24.0%, significantly ahead of the
benchmark. This outperformance was due mainly to stock picking within the
Company's equity portfolio.

Over the year there was an improvement in the rating of the Company's shares in
the stockmarket. The share price moved from a discount of 2.4% to net asset
value per share at 31 March 2004 to a premium of 1.3% at 31 March 2005. As a
result, the share price total return at 29.4% was higher than the total return
on net assets.

Portfolio Profile
Total gearing increased from 43.4% to 48.2% during the year. Equity gearing was
reduced from 26.8% to 19.0%, due principally to a rise in ordinary share prices.
Gearing in preference shares rose from 16.6% to 29.2% which reflects additional
investment during the year in high-yielding fixed income securities which made a
major contribution to the high level of income distributed to shareholders.

Gearing is explained in more detail in the 'About Your Trust' section of the
Annual Report and in Note 25 to the Financial Statements.

Earnings and Dividends
Revenue return per share was 19.45p, the same as last year.

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 29 July 2005 to shareholders on the
register at close of business on 8 July 2005.

Share Capital
As I mention above, the ordinary share price of the Company at the year end
stood at a small premium to net asset value. In order to meet any small scale
regular demand that may arise for the Company's shares, the Company obtained a
block listing facility of 700,000 ordinary shares of 50p each in December 2004.
Shares will not be issued pursuant to the block listing unless the ordinary
share price stands at a premium to the underlying net assets per share. To date
no such shares have been issued.

International Financial Reporting Standards
International Financial Reporting Standards ('IFRS') came into force on 1
January 2005 and the Company's interim report will be published at the end of
2005 under the new accounting standards. The Board is currently working with the
Company's Managers and Auditors to implement the new reporting.

One of the major changes under the new standards is the requirement to value
investments at bid price. At 31 March 2005 this would have reduced net assets by
£170,000 or 0.6p per ordinary share.

As explained in the Investment Managers' Review on page 12 of the Annual Report,
from time to time the Company has supplemented income by purchasing preference
shares cum-dividend and selling ex-dividend. Under IFRS and an effective yield
basis, income from fixed interest securities will be recognised only for the
proportion of the year for which the investment is held. Therefore, the Company
will no longer employ this method of raising income. It is likely that the
Company will increase the use of other means of generating income, such as the
writing of traded options, as explained further in the Investment Managers'
Review on page 12 of the Annual Report.

Outlook
The UK stockmarket since 2000 has been dominated by the outperformance of small
and mid-sized companies relative to their larger peers. Companies with higher
yields have also tended to perform better than those that pay a below average
dividend yield. These two factors have helped the absolute and relative
performance of Shires Income over the last two years. In the longer term, higher
yielding stocks and small and medium sized companies are likely to provide a
higher total return to their shareholders. There will, however, be periods when
these stocks fall out of favour. This may not happen soon but the level of
outperformance achieved by the Company over the last two years is unlikely to be
repeated in the shorter term.

The Board has reviewed the income forecast for the current year. There is a
number of variables which could affect the final result but the Board hopes to
maintain the existing level of dividend in respect of the year ended 31 March
2006.

Board

As described in the Directors' Report on page 19 of the Annual Report, the Board
has undertaken a formal review of its own performance and that of individual
Directors in the year to 31 March 2005. The Board recommends to shareholders the
re-election of Hamish N. Buchan, Joanna R. Davidson and myself at the Company's
forthcoming Annual General Meeting.

Annual Report and Annual General Meeting

The Annual Report will be mailed to shareholders on 23 May 2005. 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 1 July 2005 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 2005
                                             2005                         2004
                       Revenue   Capital    Total   Revenue   Capital    Total
                          £000      £000     £000      £000      £000     £000

Gains on
investments                  -    11,240   11,240         -    18,065   18,065
Income                   7,596         -    7,596     7,392         -    7,392
Management and
administrative
expenses                  (600)     (201)    (801)     (566)     (186)    (752)
                        --------  -------- --------    ------   -------  -------
NET RETURN BEFORE
FINANCE
COSTS AND TAXATION       6,996    11,039   18,035     6,826    17,879   24,705
Finance costs of
borrowings              (1,224)   (1,224)  (2,448)   (1,084)   (1,084)  (2,168)
                        --------  -------- --------    ------   -------  -------
RETURN ON ORDINARY
ACTIVITIES BEFORE
TAXATION                 5,772     9,815   15,587     5,742    16,795   22,537
Taxation                     -         -        -        30         -       30
                        --------  -------- --------    ------   -------  -------
Return on ordinary
activities after
taxation
for the financial
year                     5,772     9,815   15,587     5,772    16,795   22,567
Preference
dividend                    (2)        -       (2)       (2)        -       (2)
                        --------  -------- --------    ------   -------  -------
RETURN ATTRIBUTABLE
TO
EQUITY
SHAREHOLDERS             5,770     9,815   15,585     5,770    16,795   22,565
Dividends on
equity shares           (5,713)        -   (5,713)   (5,713)        -   (5,713)
                        --------  -------- --------    ------   -------  -------

Transfer TO
reserves                    57     9,815    9,872        57    16,795   16,852
                        --------  -------- --------    ------   -------  -------
Return per
ordinary share           19.45p    33.07p   52.52p    19.45p    56.59p   76.04p
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 2005
and 2004 but is derived from those accounts. Statutory accounts for 2004 have
been delivered to the Registrar of Companies and those for 2005 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 2005
                                                         2005            2004
                                                         £000            £000
Fixed Assets
Ordinary Shares                                        81,948          74,536
Convertibles                                            7,596           6,970
Preference Shares                                      22,809          11,280
Portfolio Hedge Instruments                                90           1,414
Unlisted Investments                                    3,213           3,556
                                                  -------------   -------------
                                                      115,656          97,756
Current Assets
Debtors                                                 1,783           2,208
Dealing investments held by subsidiary                    922             205
undertakings
Cash at bank and in hand                                    2             732
                                                  -------------   -------------
                                                        2,707           3,145
Creditors
Amounts falling due within one year                   (14,627)         (7,856)
                                                  -------------   -------------
NET CURRENT LIABILITIES                               (11,920)         (4,711)
                                                  -------------   -------------
Total Assets less current                             103,736          93,045
liabilities
Creditors
Amounts falling due after more than one year          (25,716)        (24,897)
                                                  -------------   -------------
Net Assets                                             78,020          68,148
                                                  -------------   -------------

CAPITAL AND RESERVES
Called up share capital                                14,888          14,888
Share premium account                                  18,988          19,039
Other capital reserves
Realised                                               27,699          27,898
Unrealised                                             12,333           2,268
Revenue reserves
Realised                                                3,836           3,779
Unrealised                                                276             276
                                                  -------------   -------------
SHAREHOLDERS' FUNDS                                    78,020          68,148
                                                  -------------   -------------
(including non-equity)

Net asset value per ordinary share                      262.7p          229.5p



Shires Income plc
Consolidated Cash Flow Statement
for the year ended 31 March 2005


                                           2005      2005       2004      2004

                                           £000      £000       £000      £000

Operating activities

Dividends and interest received

from investments                                    7,061                6,383

Deposit interest received                               9                   83

Dealing subsidiary receipts                           262                1,336

Other cash received                                   723                  589

Administrative expenses                              (697)                (662)

Payments to and on behalf of Directors                (63)                 (51)

Dealing subsidiary payments                        (1,096)                (690)
                                                 ---------               ------

Net cash inflow from operating                      6,199                6,988

activities


Servicing of finance

Interest paid                            (1,611)              (1,374)

Preference dividends paid                    (2)                  (2)
                                          -------             --------

                                                   (1,613)              (1,376)


TAXATION

Consortium relief                                       -                   98


INVESTING ACTIVITIES

Purchases of investments                (78,919)             (69,083)

Sales of investments                     69,833               70,784

Hedge instrument payments                  (714)              (2,570)

Hedge instrument receipts                   742                  657
                                        -------               ------
Net cash outflow from                              (9,058)                (212)

investing activities


Equity dividends paid                              (5,713)              (5,713)
                                                   --------             --------


Financing

Debt due within one year

- increase in short-term borrowings                 9,350                1,150

                                                   --------             --------

(Decrease)/INCREASE in cash                          (835)                 935
                                                   --------             --------







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