Interim Results

Shires Income PLC
26 November 2004


News Release

26 November 2004

Shires Income plc
Interim Results for the six months to 30 September 2004

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

                                                           2004           2004
Total assets less current liabilities                     £95.3m         £93.0m
Ordinary shareholders' funds                              £70.1m         £68.1m
Net asset value per ordinary share                        236.1p         229.5p
Ordinary share price                                      231.0p         224.0p
Discount                                                    2.2%           2.4%
Revenue return per ordinary share                         11.83p          7.18p*
Dividends per ordinary share                               8.80p          8.80p*
*Half year to 30 September 2003


   • Total return on net assets for the half year to 30 September 2004 was
     6.7%, ahead of the FTSE All-Share Index benchmark return of 5.1%.
   • Total return to a shareholder over the period under review was 7.1%,
     reflecting the continued recovery in the rating of the Company's shares.
     The discount narrowed in the period from 2.4% at 31 March 2004 to 2.2%
     at 30 September 2004.
   • Revenue Return for the half year ended 30 September 2004 was
     11.83p per ordinary share compared to 7.18p for the half year ended
     30 September 2003, a rise of 64.8%.
   • A second interim dividend of 4.4p has been declared for
     payment on 31 January 2005. Dividends paid and declared to date
     total 8.8p, the same level as last year.
   • At a share price of 241.5p (24 Nov) and assuming the
     same dividends are paid this year as they were last, the
     shares yield 8.0%.

     For further information please contact:

     Mike Balfour, Managing Director
     Glasgow Investment Managers
     0141 572 2700


Shires Income plc
Interim Report 30 September 2004
Chairman's Statement

Background
   
The UK stockmarket performed steadily in the six months to 30 September 2004.
Improving corporate earnings and the belief that interest rates are nearing
their peak in the current cycle outweighed fears about rising world oil prices.
This resulted in a total return of 5.1% on the FTSE All-Share Index, the
Company's benchmark.


Investment Returns

In a period when equity prices moved in a narrow range the Company's investments
performed well. The total return on net assets for the half year to 30 September
2004 was 6.7%, which was ahead of the benchmark.

The total return to shareholders was higher at 7.1%, reflecting the continued
recovery in the rating of the Company's shares as the discount narrowed slightly
in the period to 2.2%. This discount is significantly lower than the average of
other Investment Trusts within the Company's AITC UK Income & Growth category.

Dividends

The Revenue Return per ordinary share was 11.83p, up from 7.18p last year
reflecting the growth in the dividends paid by investee companies and increased
premiums from writing traded options as the market became more stable.

The Board believes that continued growth in the dividends of UK listed companies
combined with the other ways in which the portfolio generates income should
enable the dividend for the current year to be kept at a similar level to last
year.

A second interim dividend of 4.4p has been declared, to be paid on 31 January
2005 to shareholders on the Register at close of business on 7 January 2005. A
first interim dividend of 4.4p was paid on 29 October 2004. Dividends paid and
declared to date for the current year total 8.8p, the same level as last year.

Portfolio Profile

Total gearing rose from 43.4% to 48.6% of net assets over the six months to
September 2004 as short term borrowings were increased to invest in equities and
take advantage of the rise in equity prices. This is illustrated by the growth
in equity gearing from 16.6% to 21.1% over the period.

Hedging

The Company continued to maintain hedging of the ordinary share portfolio to
protect against a significant downward movement in the general level of equity
prices. With some of the hedging instruments expiring in September 2004 the
structure was slightly altered, providing greater downside protection at most
market levels at no additional cost to the Company.

Outlook

With the economy expected to grow steadily, although more slowly in 2005, and
with any further rise in UK interest rates expected to be modest as the housing
market starts to slow down, the outlook for equity prices is a favourable one.
In comparison to historic ratings, equities still look attractive and offer the
prospect of reasonable returns.

Interim Report

The Interim Report will be mailed to shareholders on 3 December 2004. 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 2004

                                          Half year to 30 September 2004
                                                    (unaudited)
                                       Revenue         Capital           Total
                                          £000            £000            £000
Net gains on investments                     -           1,678           1,678
Income                                   4,316               -           4,316
Investment management fee                  (96)            (96)           (192)
Other administrative expenses             (180)              -            (180)
                                       ---------       ---------       ---------
Net return before finance
costs and taxation                       4,040           1,582           5,622
Finance costs of borrowings               (527)           (527)         (1,054)
                                       ---------       ---------       ---------
Return on ordinary activities
before taxation                          3,513           1,055           4,568
Taxation                                     -               -               -
                                       ---------       ---------       ---------
Return on ordinary activities
after taxation for the period            3,513           1,055           4,568
Preference dividend                         (1)              -              (1)
                                       ---------       ---------       ---------
Return attributable to
equity shareholders                      3,512           1,055           4,567
Dividends on equity shares              (2,612)              -          (2,612)
                                       ---------       ---------       ---------
Transfer to reserves                       900           1,055           1,955
                                       ---------       ---------       ---------

Returns per ordinary share               11.83p           3.56p          15.39p

Dividends per ordinary share              8.80p


Consolidated Statement of Total Return
(incorporating the Revenue Account)
for the half year ended 30 September 2004

                         Half year to 30 September 2003     Year to 31 March 2004
                                   (unaudited)                   (audited)
                          Revenue    Capital      Total   Revenue   Capital     Total
                             £000       £000       £000      £000      £000      £000

Net gains on investments        -     15,385     15,385         -    18,065    18,065
Income                      2,866          -      2,866     7,392         -     7,392
Investment managementfee      (91)       (91)      (182)     (186)     (186)     (372)
Other administrative
expenses                     (151)         -       (151)     (380)        -      (380)
                            -------    -------    -------   -------   -------   -------
Net return before
finance costs and taxation  2,624     15,294     17,918     6,826    17,879    24,705
Finance costs of
borrowings                   (506)      (506)    (1,012)   (1,084)   (1,084)   (2,168)
                            -------    -------    -------   -------   -------   -------
Return on ordinary
activities
before taxation             2,118     14,788     16,906     5,742    16,795    22,537
Taxation                       13          -         13        30         -        30
                            -------    -------    -------   -------   -------   -------
Return on ordinary
activities after taxation 
for the period              2,131     14,788     16,919     5,772    16,795    22,567
Preference dividend            (1)         -         (1)       (2)        -        (2)
                            -------    -------    -------   -------   -------   -------
Return attributable to
equity shareholders         2,130     14,788     16,918     5,770    16,795    22,565
Dividends on equity
shares                     (2,612)         -     (2,612)   (5,713)        -    (5,713)
                            -------    -------    -------   -------   -------   -------
Transfer (from)/to
reserves                     (482)    14,788     14,306        57    16,795    16,852
                            -------    -------    -------   -------   -------   -------

Returns per ordinary
share                        7.18p     49.83p     57.01p    19.45p    56.59p    76.04p

Dividends per ordinary
share                        8.80p                          19.25p



Group Balance Sheet as at 30 September 2004


                               30 September    31 March 2004        30 September
                                     2004                                 2003
                                (unaudited)         (audited)        (unaudited)
                                     £000               £000              £000
Listed investments
Ordinary shares                    80,704             74,536            69,193
Convertibles                        7,090              6,970             7,297
Other fixed interest               12,215             11,280             7,602
                                -----------        -----------       -----------
                                  100,009             92,786            84,092
Unlisted investments                3,278              3,556             3,985
                                -----------        -----------       -----------
                                  103,287             96,342            88,077
Portfolio hedge
instruments                           907              1,414             2,136
                                -----------        -----------       -----------
                                  104,194             97,756            90,213
Net current
liabilities                        (8,885)            (4,711)             (123)
                                -----------        -----------       -----------
Total assets (less
current liabilities)               95,309             93,045            90,090
Index-Linked Debenture
Stocks                            (25,206)           (24,897)          (24,488)
                                -----------        -----------       -----------
Net assets                         70,103             68,148            65,602
                                -----------        -----------       -----------

Capital and Reserves

Called up share
capital                            14,888             14,888            14,888
Share premium account              19,013             19,039            19,065
Other capital reserves
Realised                           25,248             27,898            30,596
Unrealised                          5,999              2,268            (2,463)
Revenue reserves
Realised                            4,679              3,779             3,240
Unrealised                            276                276               276
                                -----------        -----------       -----------
                                   70,103             68,148            65,602
                                -----------        -----------       -----------

Net asset value per

ordinary share                      236.1p             229.5p            220.9p

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 2004 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 2004

                                      Half year to   Half year to     Year to
                                      30 September   30 September    31 March
                                              2004           2003        2004
                                       (unaudited)    (unaudited)   (audited)
                                              £000           £000        £000
Net cash inflow from operating
activities                                   4,596          3,185       6,988

Servicing of finance                          (748)          (639)     (1,376)
Taxation                                         -              -          98
Investing activities
                                           ---------      ---------    --------
Purchases of investments                   (47,524)        (8,186)    (69,083)
Sales of investments                        41,489         12,352      70,784
Net cash inflow/(outflow) for
portfolio hedge instruments                     29         (1,398)     (1,913)
                                           ---------      ---------    --------
                                            (6,006)         2,768        (212)
Equity dividends paid                       (3,101)        (3,101)     (5,713)
                                           ---------      ---------    --------
Net cash (outflow)/ inflow before
financing                                   (5,259)         2,213        (215)
Financing
Debt due within one year
- increase/(decrease) in short-term
borrowings                                   4,650           (100)      1,150
                                           ---------      ---------    --------
Decrease/(Increase) in cash                   (609)         2,113         935
                                           ---------      ---------    --------

Reconciliation of net revenue before finance costs and taxation to net cash
inflow from operating activities
Net revenue before finance costs and
taxation                                     4,040          2,624       6,826
Investment management fee charged to
capital                                        (96)           (91)       (186)
Changes in working capital items               652            652         348
                                           ---------      ---------    --------
Net cash inflow from operating
activities                                   4,596          3,185       6,988
                                           ---------      ---------    --------



Analysis of Changes in Net Debt

                                 At                                         At

                           31 March          Cash      Non-cash   30 September
                               2004         flows       changes           2004
                          (audited)   (unaudited)   (unaudited)    (unaudited)
                               £000          £000          £000           £000
Cash at bank and in hand        732          (609)            -            123
Bank overdrafts                   -             -             -              -
Short-term borrowings        (1,650)       (4,650)            -         (6,300)
5% Index-Linked
Debenture 2008/10           (24,897)            -          (309)       (25,206)
                              -------      --------      --------      ---------
                            (25,815)       (5,259)         (309)       (31,383)
                              -------      --------      --------      ---------

Distribution of Assets

                         Valuation at                               Movements           Valuation at
                                                                   during the
                                                                     period
                             31 March                             Apprecia-             30 September
                                 2004   Purchases     Sales           tion/                     2004
                            (audited)                         (Depreci-ation)            (unaudited)

                  £000              %        £000      £000            £000      £000              %
Listed
Investments

Ordinary
shares          74,536          109.4      16,899   (13,910)          3,179    80,704          115.1
Convertibles     6,970           10.2       3,213    (2,822)           (271)    7,090           10.1
Other fixed
interest        11,280           16.6      26,031   (24,606)           (490)   12,215           17.4
Hedge
instruments      1,414            2.0          72      (100)           (479)      907            1.3
               _______        _______     _______   _______         _______     _____        _______
                94,200          138.2      46,215   (41,438)          1,939   100,916          143.9
Unlisted
investments      3,556            5.2           -         -            (278)    3,278            4.7
               _______        _______     _______   _______         _______     _____        _______
                97,756          143.4      46,215   (41,438)          1,661   104,194          148.6
                                          _______   _______         _______
Net current
liabilities     (4,711)          (6.9)                                         (8,885)         (12.7)
               _______        _______                                           _____        _______
Total assets

(less current
liabilities)    93,045          136.5                                          95,309          135.9
Index-Linked
Debenture
Stocks         (24,897)         (36.5)                                        (25,206)         (35.9)
               _______        _______                                           _____        _______
Net assets      68,148          100.0                                          70,103          100.0
               _______        _______                                           _____        _______
Net asset
value per
ordinary share   229.5p                                                         236.1p


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