Interim Results - Amendment

Shires Income PLC 19 December 2000 The issuer has made the following amendment to the Interim Results announcement released 19 December 2000 at 14:11 under RNS No 0495W. A second interim dividend of 4.35p has been declared to be paid on 31 January 2001 to shareholders on the register at close of business on 12 January 2001 and not 8 January 2001 as previously stated. All other details remain unchanged. The full corrected version is shown below. SHIRES INCOME PLC Results for the Half Year Ended 30 September 2000 Shires Income plc, with total assets of £170.5 million 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. - The total return on net assets was +0.8% for the six months to 30 September 2000, compared with a total return of -1.5% on the FTSE All-Share Index. - The return to shareholders was +10.5%, better than the return on net assets due to a reduction in the discount of share price to underlying net asset value per share to 3.5% at 30 September 2000. - A second interim dividend has been declared of 4.35p per share, making dividends for the year to date 8.7p, compared with 8.6p last year. - The Company's shareholding in Glasgow Investment Managers is now included within the portfolio of investments at the directors' valuation, and dividends received are included in the revenue account. - The Company's shareholding in Shires Smaller Companies plc is now included in the portfolio at market value. Last year it was accounted for as an associated undertaking at net asset value. - As interest rates fall equities are likely to respond favourably, in particular the cyclical stocks which offer above average yields and are well represented in the Company's portfolio. For further information please contact: David Williams, Managing Director Glasgow Investment Managers 0141 572 2700 Shires Income plc Interim Report 2000 Chairman's Statement Background In the six months under review the UK stockmarket fell slightly and the pattern of sector behaviour changed. The surge of enthusiasm for telecommunications, media and technology stocks, which had been a feature of the last months of 1999 and the early months of 2000, evaporated and investors' attention returned to the more conventional merits of companies in the less fashionable, but perhaps more sustainable, sectors of the economy. Investment Returns The total return on net assets was 0.8%, somewhat better than the return of -1.5% on the FTSE All-Share Index. The return to shareholders, at 10.5%, was well ahead of the return on net assets, as the share price rose and the discount at which the share price stood to net asset value per share fell, from 11.9% at 31 March 2000 to 3.5% at 30 September 2000. Dividends Earnings of 10.10p per share were down from 12.10p for the first half last year, due to lower premiums earned from traded option writing, but remain more than adequate to cover interim dividends paid and declared. A second interim dividend of 4.35p has been declared, to be paid on 31 January 2001 to shareholders on the register at close of business on 12 January 2001. As a first interim dividend of 4.35p was paid on 31 October 2000, dividends paid and declared to date in respect of the current year total 8.7p per share against 8.6p paid last year. Shires Smaller Companies plc 1,047,801 warrants to subscribe at a price of £1.00 per share for ordinary shares of Shires Smaller Companies plc, were exercised on 1 June 2000, the final date of exercise. As a result the Company's interest in Shires Smaller Companies plc rose from 26.7% to 28.7% of its issued share capital. The shareholding in Shires Smaller Companies is now valued in the portfolio at market price, consistent with the basis of valuation applied to all other listed security investments. Last year it was accounted for as an associated undertaking and valued at net asset value. Glasgow Investment Managers ('GIM') Under the agreement with the executive shareholders of GIM the Company's shareholding in that company fell to 49.9%. GIM is now accounted for as an unlisted investment. A valuation is included in the portfolio of investments and dividends received are included in the revenue account. Last year the income from GIM was shown as 'Net investment management income' less the 'Minority equity interest.' Due to the change in accounting treatment comparison of GIM's performance is not apparent from the financial statements. Funds under management rose by 12% over the half year to exceed £1 billion at 30 September 2000 and pre-tax profit rose by 48% compared with the first six months last year. Outlook Aggregate output in the USA grew more slowly in the third quarter of 2000 than for over a year and the slowdown was accompanied by lower inflation. Higher interest rates and the rise in the oil price appear to be combining to restrain the economy. In the UK the picture is similar, with output growth less robust and inflation lower. If these developments presage a fall in interest rates, equities are likely to respond favourably, in particular the cyclical stocks which offer above average yields and are well represented in the Company's portfolio. The Interim Report will be posted to shareholders on Friday 22nd December 2000. Copies may be obtained from the Managers, Glasgow Investment Managers Limited, Sutherland House, 149 St. Vincent Street, Glasgow G2 5DR, after that date. A J R Izat (Chairman) Consolidated Statement of Total Return (incorporating the Revenue Account) for the half year ended 30 September 2000 Half year to 30 Sept 2000 Half year to 30 Sept 1999 (unaudited) (unaudited) £000 £000 £000 £000 £000 £000 Revenue Capital Total Revenue Capital Total Gains less losses on investments - (1,232) (1,232) - (8,360) (8,360) Income from investment activity (note 1) 4,171 - 4,171 4,051 - 4,051 Net investment management income - - - 649 - 649 Administrative expenses (349) (165) (514) (304) (160) (464) Group operating return 3,822 (1,397) 2,425 4,396 (8,520) (4,124) Associated undertaking (note 3) - - - 308 1,234 1,542 Net return before finance costs and taxation 3,822 (1,397) 2,425 4,704 (7,286) (2,582) Part disposal of subsidiary undertaking - (82) (82) - (440) (440) Finance costs of borrowings: Group (888) (469) (1,357) (751) (292) (1,043) Associated undertaking - - - (69) (69) (138) Return on ordinary activities before taxation 2,934 (1,948) 986 3,884 (8,087) (4,203) Taxation (60) - (60) 89 - 89 Return on ordinary activities after taxation for the period 2,994 (1,948) 1,046 3,795 (8,087) (4,292) Preference dividend 1 - 1 1 - 1 Minority equity interest - - - 206 - 206 Return attributable to equity shareholders 2,993 (1,948) 1,045 3,588 (8,087) (4,499) Dividends on equity shares 2,579 - 2,579 2,550 - 2,550 Transfer to/(from) reserves 414 (1,948) (1,534) 1,038 (8,087) (7,049) Return per ordinary share 10.10p (6.57)p 3.53p 12.10p (27.27)p (15.17)p Dividends per ordinary share 8.70p 8.60p Group Balance Sheet and Distribution of Assets at 30 September 2000 Valuation at Valuation at Net purchases/ Appreciation/ 30 September 31 March 2000 (sales) or (Depreciation) 2000 transfer (unaudited) (audited) £000 % £000 % £000 £000 Listed associated undertaking: Shires Smaller Companies (note 3) - - 12,943 9.6 (12,943) - Other listed investments: Ordinary shares 147,845 111.3 137,428 102.3 13,388 (2,971) Convertibles 11,270 8.5 14,463 10.8 (729) (2,464) Other fixed interest 7,084 5.3 7,702 5.7 (220) (398) 166,199 125.1 172,536 128.4 (504) (5,833) Former subsidiary undertaking: Glasgow Investment Managers (note 2) 6,700 5.1 - - 889 5,811 Other unlisted investments 531 0.4 492 0.4 (13) 52 173,430 130.6 173,028 128.8 372 30 Tangible fixed assets - - 175 0.2 Net current liabilities (2,984) (2.2) (793) (0.6) Total assets (less current liabilities) 170,446 128.4 172,410 128.4 Index-Linked Debenture Stocks (37,678) (28.4) (37,260) (27.8) Minority equity interest - - (848) (0.6) Net assets 132,768 100.0 134,302 100.0 Capital and Reserves Called up share capital 14,874 14,874 Share premium account 20,309 20,339 Other capital reserves Realised 69,332 69,440 Unrealised 24,086 24,683 Revenue reserves Realised 3,891 4,430 Unrealised 276 536 132,768 134,302 Net asset value per ordinary share 447.6p 452.8p Summarised Consolidated Cash Flow Statement for the half year ended 30 September 2000 Half year to Half year to 30 September 2000 30 September 1999 (unaudited) (unaudited) £000 £000 £000 £000 Net cash inflow from operating activities 2,881 4,761 Servicing of finance (900) (947) Taxation 341 64 Capital expenditure Purchases of investments (23,363) (30,210) Purchases of tangible fixed assets - (31) Sales of investments 22,610 26,806 (753) (3,435) Acquisitions and disposals Net cash disposed of with subsidiary (2,224) - Expenses of group reorganisation - (246) (2,224) (246) Equity dividends paid (2,980) (2,719) Net cash outflow before financing (3,635) (2,522) Financing Debt due within one year -increase in short-term borrowings 2,001 3,182 -decrease in bank overdrafts (490) (452) (Decrease)/Increase in cash at bank and in hand (2,124) 208 Analysis of Changes in Net Debt As at Disposed Other As at 31 March Cash of with non-cash 30 September 2000 flow subsidiary changes 2000 £000 £000 £000 £000 £000 Cash at bank and in band 3,574 100 (2,224) - 1,450 Bank overdrafts (820) 490 - - (330) Short-term borrowings (2,010) (2,001) - - (4,011) 5% Index-Linked Debenture 2008/2010 (22,441) - - (277) (22,718) 3.4375% Index/Linked Debenture 2017/2019 (14,819) - - (141) (14,960) (36,516) (1,411) (2,224) 418 (40,569) NOTES 1. Income PARENT UNDERTAKING AND 2000 1999 INVESTMENT DEALING SUBSIDIARY £000 £000 Income from listed investments Franked investment income 3,384 3,264 UK unfranked investment income 112 112 3,496 3,376 Other income from investment activity Unlisted franked investment income (note 2) 424 - Unlisted UK unfranked investment income 40 - Interest receivable 35 29 Traded option premiums 211 599 Underwriting commission - 37 Profit less losses of dealing subsidiary (35) 10 675 675 4,171 4,051 INVESTMENT MANAGEMENT SUBSIDIARY Investment management fees - 1,830 Interest receivable - 36 - 1,866 Total income comprises: Dividends 3,960 3,376 Interest 35 65 Other income from investment activity 176 646 Investment management fees - 1,830 TOTAL INCOME 4,171 5,917 Listed franked investment income includes special dividends totalling £274,000 (1999 £406,000) 2. Investment Management Former Subsidiary Undertaking With effect from 1 April 2000, the Company's interest in the investment management subsidiary, Glasgow Investment Managers Limited (GIM) was reduced from 54.9% to 49.9%. At the same time, the directors and staff of GIM increased their interest in GIM from 45.1% to 50.1%, giving them a controlling interest. Consequently, this investment is now accounted for as an unlisted investment and is held through an intermediate holding company, GIM Holdings Limited, which pays 8% Interest on an unsecured loan stock issued to Shires Income plc. The Directors' valuation of this investment is based on a prudent assessment of the value of listed fund management companies, appropriately discounted. The following table is a summary of the net assets of GIM which have been reclassified or disposed of. £000 Fixed assets 175 Dealings investments 50 Debtors 837 Cash at bank and in hand 2,224 Creditors (1,467) Minority equity interest (848) 971 Reduction in group interest in net assets (94) Write back of overprovision for expenses of disposal 12 Net assets reclassified as an unlisted investment 889 3. Shires Smaller Companies plc In view of the change in control of GIM noted above, as a consequence the Directors consider that the Company and the Group no longer exercises significant influence over Shires Smaller Companies plc (SSC), a listed investment trust company which is also managed by GIM. The carrying value of SSC has been written down to £12,511,000, being the market value of its shares at 30 September 2000, in accordance with the policy now to treat SSC as part of the Group's investment portfolio. A subsidiary of the Company held 1,047,801 warrants to subscribe for ordinary shares in SSC. During the period, these warrants were transferred back to the Company and exercised, increasing the Company's interest from 26.7% to 28.7% of the issued share capital of this company. 4. Assets at 31 March 2000 The information relating to the group balance sheets as at 31 March 2000 is an extract 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 Companies Act 1985.

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