Interim Results

Shires Income PLC
27 November 2003

News Release

27 November 2003

Shires Income plc

Interim Results for the six months to 30 September 2003

Shires Income plc aims to provide shareholders with 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
                                                           2003           2003
Total assets less current liabilities                     £90.1m         £75.4m
Ordinary shareholders' funds                              £65.6m         £51.2m
Net asset value per ordinary share                        220.9p         172.7p
Ordinary share price                                      229.5p         141.5p
Premium/(Discount)                                          3.9%         (18.1)%
Revenue return per ordinary share                          7.18p          8.17p*
Dividends per ordinary share                               8.80p          8.80p*
*Half year to 30 September 2002

• Total return on net assets for the half year to 30 September 2003
  was 33.0%, well ahead of the FTSE All-Share Index benchmark of 19.0%.

• Total return to a shareholder over the period under review was
  68.4%, reflecting the recovery in the rating of the Company's shares, from an
  unusually high discount of 18.1% at 31 March 2003 to a premium of 3.9% at 30
  September 2003.

• Total gearing fell from 50.3% to 37.5% of net assets over the six
  months to 30 September 2003. This was principally due to the rise in value of
  the ordinary share portfolio but also partly to net sales of securities,
  principally equities.

• A second interim dividend of 4.4p has been declared for payment on
  30 January 2004. Dividends paid and declared to date total 8.8p, the same level
  as last year.

For further information please contact:

David Williams, Managing Director
Glasgow Investment Managers
0141 572 2700



Shires Income plc
Interim Report 30 September 2003
Chairman's Statement

Background

After the start of the conflict in Iraq in March 2003 stockmarkets around the
world rose steadily. Against a background of improving investor confidence UK
ordinary share prices responded favourably to forecasts of faster output growth
and lower inflation. The total return on the FTSE All-Share Index for the six
month period to 30 September 2003 was 19.0%.


Investment Returns

In a period when equity prices were recovering from depressed levels, the
Company's investments performed very well. The total return on net assets for
the half year to 30 September 2003 was 33.0%, well ahead of the FTSE All-Share
Index benchmark.

The total return to a shareholder was 68.4%, reflecting the recovery in the
rating of the Company's shares, from an unusually high discount of 18.1% at 31
March 2003 to a premium of 3.9% at 30 September 2003.

Dividends

The Revenue Return per ordinary share was 7.18p, down from 8.17p last year.
Income from listed investments was lower, reflecting sales of equities prior to
repayment of a tranche of Index-linked Debenture, and there was no premium
income from writing traded options, as investment policy focused on achieving
growth in net asset value.

The Board remains confident that the revenue earning capacity of the portfolio
is adequate to maintain the dividend for the current year. Moreover, revenue
reserves amount to over 60% of total dividends paid last year.

A second interim dividend of 4.4p has been declared, to be paid on 30 January
2004 to shareholders on the Register at close of business on 9 January 2004. A
first interim dividend of 4.4p was paid on 31 October 2003. Dividends paid and
declared to date for the current year total 8.8p, the same level as last year.

Portfolio Profile

Total gearing fell from 50.3% to 37.5% of net assets over the six months to
September 2003. This was due principally to the rise in value of the ordinary
share portfolio but also partly to net sales of securities, principally
equities.

Hedging

To provide some protection against the risk of breaching banking covenants in
the event of a significant downward movement in the general level of equity
prices, hedging of the ordinary share portfolio was introduced in September
2003. This protection, at the cost of an initial outlay equivalent to less than
0.6% per annum of net assets over the five year period, is designed to cover the
period until the 5.0% Index-linked Debenture 2008/10 becomes due for redemption.

Outlook

Consensus forecasts of output growth have been raised for all regions but the
Eurozone and indicate that business activity in all major economies except,
perhaps, Japan will continue to accelerate to 2004. This improvement in economic
prospects does not yet appear to be reflected in the ratings of UK ordinary
shares, which continue to offer attractive investment opportunities on dividend
yields above the average of the last ten years.

Board

It is with great regret that I have to report that John Stubbs, a member of the
Board since 1985, died in July 2003. His contribution to the Board's
deliberations is sadly missed.

Following the deliberations of the Nominations Committee, including a review of
skills available to the Board, Mervyn Couve, senior partner of solicitors
Speechly Bircham, was appointed a director in October 2003 and will come forward
for election at the next annual general meeting.

Interim Report

The Interim Report will be mailed to shareholders on 4 December 2003. 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 Statement of Total Return
(incorporating the Revenue Account)
for the half year ended 30 September 2003

                                          Half year to 30 September 2003
                                                     (unaudited)
                                       Revenue         Capital           Total
                                          £000            £000            £000
Net gains on investments                     -          15,385          15,385
Income                                   2,866               -           2,866
Investment management fee                  (91)            (91)           (182)
Other administrative expenses             (151)              -            (151)
                                       ---------       ---------       ---------
Net return before finance
costs and taxation                       2,624          15,294          17,918
Finance costs of borrowings               (506)           (506)         (1,012)
                                       ---------       ---------       ---------
Return on ordinary activities
before taxation                          2,118          14,788          16,906
Taxation                                    13               -              13
                                       ---------       ---------       ---------
Return on ordinary activities
after taxation for the period            2,131          14,788          16,919
Preference dividend                         (1)              -              (1)
                                       ---------       ---------       ---------
Return attributable to
equity shareholders                      2,130          14,788          16,918
Dividends on equity shares              (2,612)              -          (2,612)
                                       ---------       ---------       ---------
Transfer (from)/to reserves               (482)         14,788          14,306
                                       ---------       ---------       ---------

Returns per ordinary share                7.18p          49.83p          57.01p
Dividends per ordinary share              8.80p



Consolidated Statement of Total Return
(incorporating the Revenue Account)
for the half year ended 30 September 2003

                       Half year to 30 September 2002     Year to 31 March 2003
                                 (unaudited)                   (audited)
                        Revenue    Capital      Total   Revenue   Capital     Total
                           £000       £000       £000      £000      £000      £000

Net losses on
investments                   -    (44,595)   (44,595)        -   (55,173)  (55,173)
Income                    3,632          -      3,632     7,542         -     7,542
Investment
management fee             (138)      (138)      (276)     (236)     (236)     (472)
Other
administrative
expenses                   (185)         -       (185)     (355)        -      (355)
                          -------    -------    -------   -------   -------   -------
Net return before
finance
costs and
taxation                  3,309    (44,733)   (41,424)    6,951   (55,409)  (48,458)
Finance costs
of borrowings              (902)      (112)    (1,014)   (1,202)   (2,367)   (3,569)
                          -------    -------    -------   -------   -------   -------
Return on ordinary
activities
before
taxation                  2,407    (44,845)   (42,438)    5,749   (57,776)  (52,027)
Taxation                     20          -         20       106         -       106
                          -------    -------    -------   -------   -------   -------
Return on ordinary
activities
after taxation
for the period            2,427    (44,845)   (42,418)    5,855   (57,776)  (51,921)
Preference
dividend                     (1)         -         (1)       (2)        -        (2)
                          -------    -------    -------   -------   -------   -------
Return attributable
to
equity
shareholders              2,426    (44,845)   (42,419)    5,853   (57,776)  (51,923)
Dividends on
equity shares            (2,612)         -     (2,612)   (5,713)        -    (5,713)
                          -------    -------    -------   -------   -------   -------
Transfer
(from)/to
reserves                   (186)   (44,845)   (45,031)      140   (57,776)  (57,636)
                          -------    -------    -------   -------   -------   -------

Returns per
ordinary share             8.17p   (151.11)p  (142.94)p   19.72p  (194.68)p (174.96)p

Dividends per
ordinary share             8.80p                          19.25p



Group Balance Sheet as at 30 September 2003

                                30 September      30 September   31 March 2003
                                        2003              2002
                                 (unaudited)       (unaudited)       (audited)
                                        £000              £000            £000
Listed investments
Ordinary shares                       69,193            86,209          60,318
Convertibles                           7,297             9,746           6,083
Other fixed interest                   7,602             7,164           6,598
                                   -----------       -----------      ----------
                                      84,092           103,119          72,999
Unlisted investments                   3,985             4,557           3,159
                                   -----------       -----------      ----------
                                      88,077           107,676          76,158
Portfolio hedge
instruments                            2,136            (8,140)            923
                                   -----------       -----------      ----------
                                      90,213            99,536          77,081
Net current
(liabilities)/assets                    (123)            3,655          (1,675)
                                   -----------       -----------      ----------
Total assets (less
current liabilities)                  90,090           103,191          75,406
Index-Linked Debenture
Stocks                               (24,488)          (39,290)        (24,110)
                                   -----------       -----------      ----------
Net assets                            65,602            63,901          51,296
                                   -----------       -----------      ----------

Capital and Reserves

Called up share
capital                               14,888            14,888          14,888
Share premium account                 19,065            20,285          19,091
Other capital reserves
Realised                              30,596            70,419          35,368
Unrealised                            (2,463)          (45,363)        (22,049)
Revenue reserves
Realised                               3,240             3,396           3,722
Unrealised                               276               276             276
                                   -----------       -----------      ----------
                                      65,602            63,901          51,296
                                   -----------       -----------      ----------

Net asset value per
ordinary share                         220.9p            215.2p          172.7p

Note: These are not statutory accounts under section 240 of the Companies Act
1985 ('the Act') and are unaudited. The information relating to the year ended
31 March 2003 is extracted from the latest audited accounts which have been
delivered to the Registrar of Companies; the report of the auditors on these
accounts was unqualified and did not contain a statement under section 237(2) or
(3) of the Act.

Consolidated Cash Flow Statement
for the half year ended 30 September 2003

                                      Half year to   Half year to     Year to
                                      30 September   30 September    31 March
                                              2003           2002        2003
                                       (unaudited)    (unaudited)   (audited)
                                              £000           £000        £000
Net cash inflow from operating
activities                                   3,185          4,119       7,024

Servicing of finance                          (639)          (967)     (1,804)
Taxation                                         -             97          97
Investing activities
                                           ---------      ---------    --------
Purchases of investments                    (8,186)       (19,201)    (49,537)
Sales of investments                        12,352         33,313      83,653
Net cash outflow for portfolio hedge
instruments                                 (1,398)          (443)     (8,570)
                                           ---------      ---------    --------
                                             2,768         13,669      25,546
Equity dividends paid                       (3,101)        (3,101)     (5,713)
                                           ---------      ---------    --------
Net cash inflow before financing             2,213         13,817      25,150
Financing
Repayment of 3.4375% Index-Linked
Debenture                                        -              -     (16,891)
Debt due within one year
- decrease in short-term borrowings           (100)       (10,000)     (9,500)
                                           ---------      ---------    --------
Increase/(decrease) in cash                  2,113          3,817      (1,241)
                                           ---------      ---------    --------

Reconciliation of net revenue before finance costs and taxation to net cash
inflow from operating activities
Net revenue before finance costs and
taxation                                     2,624          3,309       6,951
Investment management fee charged to
capital                                        (91)          (138)       (236)
Changes in working capital items               652            948         309
                                           ---------      ---------    --------
Net cash inflow from operating
activities                                   3,185          4,119       7,024
                                           ---------      ---------    --------



Analysis of Changes in Net Debt

                                 At                                         At
                           31 March          Cash      Non-cash   30 September
                               2003         flows       changes           2003
                          (audited)   (unaudited)   (unaudited)    (unaudited)
                               £000          £000          £000           £000
Cash at bank and in hand         45         1,865             -          1,910
Bank overdrafts                (248)          248             -              -
Short-term borrowings          (500)          100             -           (400)
5% Index-Linked
Debenture 2008/10           (24,110)            -          (378)       (24,488)
                              -------      --------      --------      ---------
                            (24,813)        2,213          (378)       (22,978)
                              -------      --------      --------      ---------

Distribution of Assets

                         Valuation at      Movements during the period              Valuation at
                             31 March                         Apprecia-             30 September
                                 2003   Purchases     Sales        tion                     2003
                            (audited)                                                (unaudited)
                  £000              %        £000      £000        £000      £000              %
Listed
Investments

Ordinary
shares          60,318          117.6       4,624    (8,930)     13,181    69,193          105.5
Convertibles     6,083           11.9       3,562    (3,422)      1,074     7,297           11.1
Other fixed
interest         6,598           12.9           -         -       1,004     7,602           11.6
Portfolio
hedge
instruments        923            1.8       2,570      (657)       (700)    2,136            3.2
               _______        _______     _______   _______     _______     _____        _______
                73,922          144.2      10,756   (13,009)     14,559    86,228          131.4
Unlisted
investments      3,159            6.1           -         -         826     3,985            6.1
               _______        _______     _______   _______     _______     _____        _______
                77,081          150.3      10,756   (13,009)     15,385    90,213          137.5
                                          _______   _______     _______
Net current
liabilities     (1,675)          (3.3)                                       (123)          (0.2)
               _______        _______                                       _____        _______
Total assets

(less current
liabilities)    75,406          147.0                                      90,090          137.3
Index-Linked
Debenture
Stocks         (24,110)         (47.0)                                    (24,488)         (37.3)
               _______        _______                                       _____        _______
Net assets      51,296          100.0                                      65,602          100.0
               _______        _______                                       _____        _______
Net asset
value per
ordinary share   172.7p                                                     220.9p




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