Final Results

Shires Income PLC
25 May 2007

                                        News Release



25 May 2007



Shires Income plc
Preliminary Results for the year ended 31 March 2007


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.


                                                                           2007               2006
Total Investments                                                       £138.6m            £131.7m
Ordinary shareholders' funds                                             £99.8m             £97.5m

Net asset value (NAV) per ordinary share                                 336.0p             328.4p
Ordinary share price                                                    310.75p             313.5p

(Discount) (ordinary share price to NAV)                                 (4.5%)             (1.4%)

Revenue return per ordinary share                                        20.16p             19.51p
Dividends per ordinary share                                             19.25p             19.25p

Gearing                                                                   38.8%              35.1%



Highlights



•         Based upon the share price of 310.75p at 31 March 2007, the dividend
yield was 6.2%, compared to 2.8% for the FTSE All-Share Index.



•         The total return on net assets was 8.9%, which compared with a return
of 11.1% on the FTSE All-Share Index, the companies benchmark.



•         The equity portfolio outperformed the benchmark during the year.
Relative performance was held back by the fixed interest portfolio which
underperformed equities as interest rates rose.



•         Equity gearing increased from 3.9% at 31 March 2006 to 8.0% at 31
March 2007, due to the strong performance of equities compared to fixed interest
securities.



•         With inflation exceeding the Government's 2% target, interets rates
are on an upward trend. While this may cause periods of stock market volatility
there are still undervalued income and growth opportunities in equities.







For further information please contact:



Mike Balfour, Chief Executive
Glasgow Investment Managers
0141 572 2700



Kenneth Harper
Glasgow Investment Managers
0141 572 2700


Shires Income plc
Annual Report 31 March 2007
Chairman's Statement



Highlights



Following three years of double figure returns, I am pleased to report that your
Company continued to grow in the year to 31 March 2007, albeit at a slower rate
than in the previous years. The total return on net assets over the year was
8.9%, as explained below; this compares to a total return of 11.1% for the FTSE
All-Share Index, the Company's benchmark.



The Company continues to produce a relatively high dividend yield. Subject to
shareholder approval, total dividends will be maintained at 19.25p, producing a
dividend yield of 6.2% based on the share price at 31 March 2007. This yield is
significantly higher than both the Company's benchmark, which yielded only 2.8%
at 31 March 2007, and the FTSE High Yield Index, which yielded 3.8% at the same
date. If approved, the final dividend will be paid on 31 July 2007 to
shareholders on the register at close of business on 6 July 2007.



Investment Returns



The Company's total return on net assets was 8.9%. The equity section of the
portfolio outperformed the benchmark over the course of the year due to good
stock selection and being geared in a rising market. The total return of the
Company is less than the FTSE All-Share index due to two factors; first the
rising cost of the Index-Linked Debenture Stock as inflation picked up during
the year, and secondly, the poor performance of the fixed interest market due to
the recent rises in interest rates as the Bank of England attempted to keep
inflation under control.



Over the year, there was a drop in the rating of the Company's shares in the
stockmarket.  The discount of the share price to the net asset value increased
from 1.4% to 4.5% at 31 March 2007. As a result, the share price total return at
5.5% was lower than the total return on net assets.



Earnings and Dividends



The revenue return per share was 20.16p for the year to 31 March 2007, 3.3%
higher than the previous year. Dividends paid in the financial year amounted to
19.25p. This comprises the third interim dividend and final dividend of the 2005
/06 financial year totalling 10.45p, and the first and second interim dividends
of the 2006/07 financial year totalling 8.80p. The third interim dividend for
2006/07 paid on 30 April 2007 and the proposed final dividend for the 2006/07
financial year payable on 31 July 2007 will be included in the financial
statements for the year ended 31 March 2008.



Portfolio Profile



Total gearing increased from 35.1% to 38.8% during the year with equity gearing
rising from 3.9% to 8.0% of net assets, due principally to a net investment of
£4.6 million into equities and the strong performance of equities compared to
fixed interest securities during the year. The relative underperformance of the
fixed interest market is highlighted by the fact that gearing in preference
shares dropped in the year from 31.2% of net assets to 30.8% at 31 March 2007
despite there being a net investment into preference shares of £2.6 million. The
investment in preference shares, however, continues to generate a high yield for
the Company and makes a major contribution to the high level of income
distributed to shareholders.



Outlook



Global economic prospects are somewhat polarised this year, with upgrades for
China, Europe and many emerging economies but slowing activity in the USA and
Japan. The UK economy is forecast to grow at between 2.5% and 3.0% due to strong
business and public spending. The economic background, apart from the US dollar,
is reasonably supportive to UK companies, and both corporate profits and
dividends are expected to grow in the year ahead, albeit at modest levels.



For investors, the key economic news in 2007 is likely to be changes in
inflation and interest rates. The recent UK inflation rate of 3.1%, measured
under the Consumer Prices Index, exceeded the Government's 2% target, and for
the first time in ten years forced the Bank of England to send a letter of
explanation to the Chancellor. Prices rose across a broad range of goods and
services, and interest rates are expected to increase to at least 5.75% in
response. The uncertainty created may cause periods of stock market volatility,
perhaps not surprising after four years of solid appreciation. While investors
wait for the current peak in the interest rate cycle, there are still
undervalued income and growth opportunities in equities.



On Company specific matters, the forthcoming year sees the obligation arise to
make the first repayment of the 5% Index-Linked Debenture Stock in March 2008.
The cost of refinancing this debenture is likely to be somewhat less than its
present cost, which should lead to savings being made by the Company in the
future.



In relation to the dividend, the Board will keep this under review for the year
to 31 March 2008 and, while not a forecast of earnings and subject to any
unforeseen circumstances, expects the dividend to be at least maintained in the
forthcoming year.



Board



The Nominations Committee met several times throughout the year and, with the
help of an independent recruitment company, recommended Mr Anthony B. Davidson's
appointment to the Board, to which he was appointed on 21 February 2007. Mr
Davidson has considerable experience in the investment industry and brings
skills complementary to those already available. The Board decided that Mr
Davidson, as a Chartered Accountant and having previously chaired a number of
other audit committees, should be appointed Chairman of the Audit Committee with
immediate effect. The Board recommends the election of Mr Davidson at the
forthcoming Annual General Meeting



As described in the Directors' Report on page 18, the Board has undertaken a
formal review of its own performance and that of individual Directors in the
year to 31 March 2007. The Board recommends to shareholders the re-election of
all the other Directors at the forthcoming Annual General Meeting.



Annual Report and Annual General Meeting



The Annual Report will be mailed to shareholders on Wednesday 30th May 2007.
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 6 July 2007 at 12 noon.




Shires Income Annual Report 2007

Investment Managers Review



Background

The twelve months to end March 2007 represented another satisfactory year for UK
equity investors. Over the period, the total return on the FTSE All Share index
was 11.1%, an outcome which was well ahead of fixed interest at 0.6% and cash at
5.0%. In a repeat of last year's trend, smaller and medium sized companies
outperformed the FTSE 100 stocks. The FTSE 100 underperformed the All-Share
Index with a total return of  9.3% as the weakness in the dollar affected larger
companies.

The year was characterised by strong global economic growth but growing concerns
about the upward direction of inflation and interest rates. When the stock
market suffered a short term setback in the second quarter of 2006, it was
principally caused by concerns of economic overheating. As the year progressed,
signs emerged of a slowdown in the US and Japanese economies while Europe, China
and emerging economies continued to be upgraded by economists.

At the corporate level, UK results were generally encouraging with increased
dividend payments to shareholders. The strong merger and acquisition trend
carried through from 2006 into 2007 and further supported share prices. The size
of the deals increased, and the bid targets included well known UK companies
such as Alliance Boots and Gallaher.  Fixed interest investments suffered in
comparison to equities as they were adversely affected by increasing interest
rates.



Portfolio Strategy

During the year, exposure to listed equities was increased from 92.8% to 101.8%
of net assets by net additional investment of £4.6m. The increase in equity
investments was partly funded from the sale of convertibles and from an increase
in the overall gearing. During the year, the gearing increased from 35.1 % to
38.8% of net assets.



Revenue Account

The table below sets out the main sources of the Company's income for the last
five years



Financial Year End                                  2007          2006         2005         2004           2003
                                                       %             %            %             %             %
Ordinary Dividends                                  50.6*         44.3         45.5          51.5          56.6
Preference Dividends                                28.6          25.6         26.9          16.4          13.4
Shires Smaller Companies plc                         7.2          11.2         11.4          11.7          11.5
Fixed Interest and Bank Interest                     1.6           1.9          1.5           2.7           5.0
Glasgow Dividends and Interest                       0.0           0.0          0.0           0.3           0.8
Preference Share Switching                           0.0           0.0          6.5           6.8           9.2
Dealing Subsidiary                                   3.1           2.2        (1.5)           7.1           0.2
Traded Option Premiums                               8.9          14.8          9.7           3.5           3.3
 
                                                   100.0         100.0        100.0         100.0         100.0

Total Income (£000s)                               8,062         7,741        7,611         7,392         7,542



* includes special dividends: 2007 - 3.5% of total income.

The Revenue Account Table identifies the sources of the portfolio's income and
the proportion generated from each area. In 2007, the largest source of income
was dividends from ordinary shares, including Shires Smaller Companies, as
investee companies increased their dividends. This was followed by dividends
from preference shares. Together these investments generated 86.4% of total
income.

The balance of the income, at 13.6%, came from debt securities, bank interest,
traded option writing and from Wiston Investment Company Limited, our dealing
subsidiary. In the forthcoming financial year it is expected that income from
traded options, market conditions allowing, will increase.

The total income generated by the portfolio increased from £7.74m to £8.06m
during the year.



Equities

Over the year to 31March 2007, the listed equity portfolio increased in value
from £90.5m to £101.6m and outperformed its benchmark, the FTSE - All Share
index. The portfolio benefited from its overweight position in medium and
smaller sized companies and from being underweight in FTSE100 stocks. At a
sector level, the portfolio maintained very low exposures to Oil & Gas and
Pharmaceuticals which was positive for performance, as both sectors were weak in
the period. Finally, two of the holdings were the subject of bids. Gallaher
Group was bid for by Japan Tobacco and AWG, the water utility, was acquired by
private equity.



By sector, Financials continued to account for the largest part of the equity
portfolio standing at 43% by the year end. During the year, the holding in
Alliance & Leicester was sold after a period of takeover speculation had driven
the shares to an overvalued level. A new holding was established in Royal Bank
of Scotland Group where dividend and earnings growth exceeded both the market
and its peers. The life assurance sector also provided some attractive
investment opportunities. The holding in Chesnara was increased and the holding
in Friends Provident was switched into Prudential.



There was a marked change to Consumer Services exposure which, over the year,
declined from 16.6% to 10.5% of the equity portfolio. Price competition in
general retail was relentless and along with increasing sales on the internet
had a negative effect on many retailers. Although both Woolworths and DSG
International are well managed companies, they operate in increasingly difficult
markets. Woolworths was sold due to the highly seasonal nature of their sales
and competition from retailers such as Tesco and Argos. The holding in DSG was
sold due to price deflation and concern about the impact of internet retailing
on their UK margins. By 31st March 2007, the portfolio held only one retail
stock, Topps Tiles, for its cash generation and yield. The largest investment in
Consumer Services was the transport company, Arriva.



Utilities made a positive contribution to performance over the period, helped by
the £2.2bn private equity bid for AWG. During the year, investments in utilities
increased from 6.8% to 8.4% of the portfolio with a new holding added in Pennon.
The news flow on Severn Trent was positive with the demerger of its waste
management company, Biffa, well received by the stock market. The holding in
Biffa was sold in December 2006, about two months after the demerger and for a
much higher share price.



The strong global economy created good trading conditions for Industrial sectors
such as engineering, and during the year  investments in this area increased
from 14.5% to 15.3% of  total listed equities. New holdings included the
engineers, Titan Europe and Weir Group. A small holding was also established in
Tanfield, a manufacturer of zero emission vehicles. BBA followed the trend of
businesses refocusing, by demerging its operations into two companies, Fiberweb
and BBA Aviation. The holding in Fiberweb was sold shortly after the demerger
while BBA Aviation was retained because it offers better growth prospects.



Once again this year, the Company's investment in Shires Smaller Companies plc
was helpful. Share price total return over the year was 17.0%, ahead of the
Smaller Companies Index total return of 15.1%, and 5.9 percentage points ahead
of the total return from the FTSE All-Share Index. At the year end, the shares
yielded 4.9%.



Mackintosh High Income OEIC

In March 2006, Glasgow Investment Managers launched an OEIC (open ended
investment company) called Mackintosh High Income Fund with a target yield of
5.5%. Shires Income invested a total of £5m in the new fund in March and April
2006 and in the year to 31 March 2007, the holding outperformed its benchmark
and paid the target yield. A year on from the launch, the Mackintosh High Income
Fund is established and growing, and Shires Income has reduced its holding by
£0.8m to £4.6m.



Convertibles

In the period under review, there were two transactions in the convertible
portfolio. In April 2006, the Slough Estates 8.25% cumulative convertible issue
was subject to final conversion into Slough Estates ordinary shares. The
ordinary shares were sold later in the year. The holding in SMG 6.5% convertible
loan stock was sold due to the risk that the company might breach its banking
covenenants, after a sharp fall in profits.



Preference Shares

The preference share portfolio is an important source of income for the Company
and as at 31 March 2007 accounted for £ 30.7m out of £138.6m of gross assets.
During the year, a number of changes were made to the portfolio to enhance
income generation, including the disposal of Bellway 9.5% and re-investment in
Standard Chartered 8.25% preference shares, and the sale of Ecclesiastical
8.625% with the proceeds invested into General Accident 7.875%.



Investment Performance Analysis



                                                                         2007
                                                                 Contribution
                                                                           %



FTSE All-Share Index, total return                                     11.1

Equities (inc Shires Smaller Companies) relative to benchmark           2.6

Equity Gearing                                                          0.1

Fixed Income portfolio, total return                                   -1.1

Unlisted Investments, including Glasgow                                 1.0

Option writing                                                         -0.2

Hedging activity                                                       -0.3

Index-Linked Debenture Stock                                           -2.6

Other Financing Costs and Expenses                                     -1.7


Total Return on Net Assets                                              8.9



The total return of the company during the year was, at 8.9%, below that of the
FTSE All-Share Index which returned 11.1%. Stock selection was good, the equity
portfolio outperforming the benchmark by 2.6%, but the fixed interest portfolio
was disappointing contributing -1.1%. The other major drag on performance was
the rising cost of  the cost of the Index Linked Debenture Stock. Unlisted
Investments, including the company's investment in Glasgow Investment Managers,
were a positive, contributing 1.0%.



Prospects

The UK economy continues to perform more strongly than forecast, causing
problems with inflation which will probably require higher interest rates to
contain it. The uncertainty regarding interest rates has already caused two
temporary stock market setbacks and may continue to affect investor confidence
in the year ahead. Aside from the macroeconomic risks, the stock market should
continue to benefit from merger and acquisition activity, while UK companies are
still reporting satisfactory earnings and dividend growth. After four years of
strong total returns from equities, investors should be prepared for more modest
share price appreciation and higher volatility.




Shires Income plc




Consolidated Income Statement
for the year ended 31 March 2007
                                                        2007                                2006
                                             Revenue     Capital       Total  Revenue   Capital    Total
                                                £000        £000        £000     £000      £000     £000

Gains on investments at fair value                 -       3,843       3,843        -    18,088   18,088
INVESTMENT INCOME
Dividend Income                                6,962           -       6,962    6,282         -    6,282
Interest Income                                  115        (96)          19      123     (102)       21
Traded Option Premiums                           715           -         715    1,138         -    1,138
Deposit Interest                                  16           -          16       15         -       15
Other Revenue on Financial Assets held             4           -           4       10         -       10
for trading
Income of dealing subsidiary                     250           -         250      173         -      173
                                               8,062       3,747      11,809    7,741    17,986   25,727
EXPENSES
Investment Management fee                      (268)       (268)       (536)    (246)     (246)    (492)
Other Administrative expenses                  (340)           -       (340)    (409)         -    (409)
Finance cost of borrowings                   (1,467)     (1,518)     (2,985)  (1,294)   (1,345)  (2,639)
                                             (2,075)     (1,786)     (3,861)  (1,949)   (1,591)  (3,540)
PROFIT BEFORE TAX                              5,987       1,961       7,948    5,792    16,395   22,187
Tax expense                                        -           -           -        -         -        -
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF       5,987       1,961       7,948    5,792    16,395   22,187
THE COMPANY
Earnings per ordinary share (pence)           20.16p       6.61p      26.77p   19.51p    55.24p   74.75p



The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS.  The supplementary revenue return and capital
columns are both prepared under guidance published by the Association of
Investment Companies. All items derive from continuing operations.



All income is attributable to the equity holders of the parent company. There
are no minority interests.



The following table shows the revenue for each year under IFRS less the
dividends declared in respect of the financial year to which they relate.  This
table is not part of the Consolidated Income Statement.
                                                                       Year to                   Year to
                                                                 31 March 2007             31 March 2006
                                                                          £000                      £000

Revenue for the period                                                 5,987                       5,792
Dividends for the period                                              (5,715)*                  (5,715)+
                                                                         272                         77
                                                               



*Relates to first three interim dividends (each 4.4p) and the final dividend
(6.05p) declared in respect of the financial year 2006/07.

+ Relates to first three interim dividends (each 4.4p) and the final dividend
(6.05p) declared in respect of the financial year 2005/06.




Shires Income plc
Group Balance Sheet
as at 31 March 2007
                                                                 2007                    2006                    2005
                                                                 £000                    £000                    £000
NON CURRENT ASSETS
Ordinary Shares                                               101,651                  90,493                  81,897
Convertibles                                                    1,731                   6,955                   7,538
Other fixed interest                                           30,727                  30,406                  22,748
Hedge Instruments                                                   -                     362                     716
Unlisted Investments                                            4,463                   3,498                   3,213
                                                              138,572                 131,714                 116,112
CURRENT ASSETS
Trade and other receivables                                       904                      30                      30
Accrued income and prepayments                                  2,038                   1,614                   1,770
Financial assets of dealing subsidiary                          1,047                     501                     995
Cash and cash equivalents                                          30                   1,212                     126
                                                                4,019                   3,357                   2,923
CURRENT LIABILITIES
Trade and other payables                                        (456)                   (733)                   (409)
Short-term borrowings                                        (14,856)                (10,315)                (11,105)
Index-Linked Debenture Stock                                  (9,153)                       -                   (753)
                                                             (24,465)                (11,048)                (12,267)

NON CURRENT LIABILITIES
Index-Linked Debenture Stock                                 (18,306)                (26,499)                (25,716)
NET ASSETS                                                     99,820                  97,524                  81,052

Issued capital and reserves attributable to
equity holders of the parent
Called up share capital                                        14,899                  14,888                  14,888
Share premium account                                          18,937                  18,936                  18,987
Retained Earnings
  Realised capital reserve                                     35,451                  32,667                  27,714
  Unrealised capital reserve                                   22,843                  23,615                  12,122
Revenue reserves                                                7,690                   7,418                   7,341
SHAREHOLDERS' FUNDS                                            99,820                  97,524                  81,052

Net asset value per ordinary share (pence)                     336.0p                  328.4p                  272.9p








Shires Income plc
Consolidated Cash Flow Statement
for the year ended 31 March 2007

                                                                                          2007              2006
                                                                                          £000              £000

CASH FLOWS FROM Operating activities
Investment income received                                                               6,689             6,550
Deposit interest received                                                                   19                12
Investment management fee paid                                                           (534)             (506)
Sales less purchases of current financial assets held for trading                        (296)               667
Other cash receipts                                                                        884             1,099
Other cash expenses                                                                      (392)             (332)
CASH GENERATED FROM OPERATIONS                                                           6,370             7,490
Interest paid                                                                          (2,015)           (1,854)
Taxation                                                                                     -                 -
NET CASH INFLOWS FROM OPERATING ACTIVITIES                                               4,355             5,636
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments                                                               (55,781)          (55,325)
Sales of investments                                                                    51,272            60,125
Purchase of hedge instruments                                                                -           (2,722)
Sale of hedge instruments                                                                   83                 -
NET CASH (OUTFLOW)/INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES                          (4,426)             2,078
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues                                                                  63                 -
Equity dividends paid                                                                  (5,715)           (5,715)
NET CASH (OUTFLOW) FROM FINANCING ACTIVITIES                                           (5,652)         (5,715)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS                                   (5,723)             1,999
Cash and cash equivalents at start of period                                           (9,103)          (11,102)
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            (14,826)           (9,103)
CASH AND CASH EQUIVALENTS comprise:
Cash and cash equivalents                                                                   30             1,212
Short-term borrowings                                                                 (14,856)          (10,315
                                                                                      (14,826)           (9,103)



Shires Income plc
Consolidated Statement of Changes in Equity
for the year ended 31 March 2007



                                                                   Realised    Unrealised    Retained
                                              Share       Share     Capital       Capital     Revenue
                                            Capital     Premium     Reserve       Reserve     Reserve      Total
                                               £000        £000        £000          £000        £000       £000



AS AT 31 MARCH 2006                          14,888      18,936      32,667        23,615       7,418     97,524
Revenue profits for the year                      -           -           -             -       5,987      5,987
Capital profit for the year                       -        (51)       2,784         (772)           -      1,961
Equity dividends                                  -           -           -             -     (5,715)    (5,715)
Share Issues                                     11          52           -             -           -         63
AS AT 31 MARCH 2007                          14,899      18,937      35,451        22,843       7,690     99,820






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