Final Results

Shires Smaller Companies PLC
21 February 2002

21 February 2002



SHIRES SMALLER COMPANIES PLC
PRELIMINARY RESULTS

Shires Smaller Companies' objective is to provide a high and growing dividend
and capital growth from a portfolio invested principally in the ordinary shares
of smaller UK companies and UK fixed income securities.  The Company is managed
by Glasgow Investment Managers.

Preliminary Announcement of Results for the year ended 31 December 2001

•    In the first full year of the new higher-yielding investment strategy total
     dividends were 13.75p, against 7.5p last year.

•    The yield on the Company's ordinary shares rose to 7.0% at 31 December 2001
     from 3.8% at the beginning of the year.

•    The discount at which the ordinary share price stood to underlying net 
     asset value per share fell to 2.9% from 16.7% during 2001.

•    The total return on net assets was -10.0%, comfortably ahead of -15.5% on
     the FTSE SmallCap Index (excluding Investment Companies) and -13.3% on the
     FTSE All-Share Index.

•    The total return to shareholders was +5.1%, better than the return on net 
     assets owing to the reduction in the discount.

•    As the UK stockmarket has not yet responded significantly to the stimuli of
     lower interest rates, falls in oil prices and increasing government 
     expenditure, the ordinary share prices of UK companies continue to offer 
     good value, particularly among the higher-yielding smaller capitalisation
     stocks in which the Company invests.

For further information please contact:

David Williams, Managing Director
Glasgow Investment Managers
0141 572 2700

Shires Smaller Companies plc
Annual Report 2001
Chairman's Statement

Background

In 2001 the UK equity market fell for the second consecutive year, the first
time that this has happened since 1975.  Weak equity markets reflected the
approach and onset of recession in the major OECD economies and the impact on
business activity of the terrorist atrocities in the USA.

Investment Strategy

The year to 31 December 2001 was the first full year of the new investment
strategy.  Towards the end of 2000 additional gearing had been taken on to
permit the yield on net assets to be raised without reducing the Company's
exposure to ordinary shares in the expectation that this would lead to a
reduction in the discount at which the ordinary share price stood to net asset
value per share.

During 2001 the yield on the Company's shares rose from 3.8% to 7.0% and the
discount fell from 16.7% to 2.9%.

Portfolio Profile

At 31 December 2001 the Company's exposure to ordinary shares amounted to 105.1%
of net assets, up from 100.2% last year.  This reflected the Board's policy of
maintaining an exposure to ordinary shares approximately equal to the value of
net assets and some additional investments made during a period of stockmarket
weakness.  Total gearing rose from 52.4% to 67.1% over the year, reflecting the
reduction in net assets resulting from falls in ordinary share prices.

Investment Returns

Against a difficult stockmarket background the Company performed relatively
well.  The total return on net assets was -10.0%, which compared with returns of
-15.5% on the FTSE SmallCap Index (excluding Investment Companies) and -13.3% on
the FTSE All-Share Index.

The total return to shareholders, at +5.1%, was well ahead of the return on net
assets, due to the fall in the discount.

Earnings and Dividends

The revenue return per ordinary share was 13.52p, a significant increase on the
8.44p earned last year, due mainly to increased investment in fixed income
securities under the new higher-yielding investment strategy.

The Board is recommending a final dividend of 4.75p per ordinary share, to bring
total dividends for the year to 13.75p.  This was the figure forecast when the
new strategy was adopted and compares with total dividends last year of 7.5p.
If approved, the final dividend will be paid on 28 March 2002 to shareholders on
the register at close of business on 8 March 2002.

Outlook

Although the UK stockmarket has recovered from the depressed levels reached in
the aftermath of the terrorist attacks in the USA, it has not yet responded
significantly to the stimuli - lower interest rates, falling oil prices and
increased government expenditure - which appear to have contributed to the
recent resilience of the UK economy.  As a result the ordinary share prices of
UK companies continue to offer good value, particularly among the
higher-yielding smaller capitalisation stocks in which Shires Smaller Companies
invests.

Annual report and Annual General Meeting

The Annual Report will be mailed to shareholders on 21 February 2002.  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 Friday 22 March 2002 at 12 noon

J Stubbs
(Chairman)


Shires Smaller Companies plc
Consolidated Statement of Total Return
(incorporating the Revenue Account*)
for the year ended 31 December 2001


                                                    2001                                            2000
                                     Revenue     Capital          Total        Revenue           Capital           Total
                                        £000        £000           £000           £000              £000            £000
(Losses)/Gains on investments              -     (6,356)        (6,356)              -             3,463           3,463
Income                                 4,125           -          4,125          2,734                 -           2,734
Investment management fee                321         321            642            278               278             556
Other administrative expenses            216           -            216            188                 -             188
NET RETURN BEFORE
  FINANCE COSTS AND TAXATION           3,588     (6,677)        (3,089)          2,268             3,185           5,453
Finance costs:
  Loans and overdrafts                   629         629          1,258            500               500           1,000
  Zero coupon finance                      -         892            892              -               353             353
RETURN ON ORDINARY
  ACTIVITIES BEFORE TAXATION           2,959     (8,198)        (5,239)          1,768             2,332           4,100
Taxation                                   -           -              -              -                 -               -
RETURN ON ORDINARY
  ACTIVITIES AFTER TAXATION
  FOR THE FINANCIAL YEAR               2,959     (8,198)        (5,239)          1,768             2,332           4,100
Dividends on equity shares             3,009           -          3,009          1,608                 -           1,608
TRANSFER (FROM)/TO RESERVES             (50)     (8,198)        (8,248)            160             2,332           2,492

Return per share
 - undiluted                          13.52p    (37.45)p       (23.93)p          8.44p            11.12p          19.56p
 - fully diluted                                                                 8.27p            10.91p          19.18p
Dividends per share                   13.75p                                     7.50p



* The revenue column of this statement is the consolidated revenue account of
the Group.

The accompanying notes are an integral part of this statement.

All revenue and capital items in the above statement derive from continuing
operations.

No operations were acquired or discontinued in the year.


The financial information set out above and on the following page does not
constitute the Company's statutory accounts for the years ended 31 December 2000
and 2001 but is derived from those accounts.  Statutory accounts for 2000 have
been delivered to the Registrar of Companies and those for 2001 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 Smaller Companies plc
Group Balance Sheet
as at 31 December 2001


                                                                                      2001                        2000
                                                                                      £000                        £000
FIXED ASSETS
Ordinary shares                                                                     46,549                      52,638
Convertibles                                                                         3,592                       3,898
Corporate bonds                                                                     23,794                      23,357
Other fixed interest                                                                    83                         158
                                                                                    74,018                      80,051
CURRENT ASSETS
Debtors                                                                                923                         968
Cash at bank                                                                             -                         850
                                                                                       923                       1,818
CREDITORS
Amounts falling due within one year                                                  7,427                       7,004
                                                                                   (6,504)                     (5,186)
TOTAL ASSETS LESS CURRENT LIABILITIES                                               67,514                      74,865
CREDITORS
Amounts falling due after more than one year                                        23,222                      22,325
NET ASSETS                                                                          44,292                      52,540
EQUITY SHAREHOLDERS' FUNDS                                                          44,292                      52,540
Net asset value per ordinary share                                                  202.4p                      240.1p



Shires Smaller Companies plc
Consolidated Cash Flow Statement
for the year ended 31 December 2001


                                                                      2001        2001            2000            2000
                                                                      £000        £000            £000            £000
OPERATING ACTIVITIES
Dividends and interest received from investments                                 4,194                           1,675
Income tax recovered                                                                 -                               7
Deposit interest received                                                           43                              96
Dealing subsidiary receipts                                                        127                             733
Other cash received                                                                  7                               7
Administration expenses paid                                                     (843)                           (654)
Payments to and on behalf of Directors                                            (53)                            (46)
Dealing subsidiary payments                                                      (101)                           (603)
NET CASH INFLOW FROM OPERATING ACTIVITIES                                        3,374                           1,215
SERVICING OF FINANCE
Interest paid                                                      (1,268)                       (972)
Income tax paid                                                       (90)                           -
                                                                               (1,358)                           (972)
INVESTING ACTIVITIES
Purchases of investments                                          (39,466)                    (42,257)
Sales of investments                                                37,937                      26,217
NET CASH OUTFLOW FROM INVESTING ACTIVITIES                                     (1,529)                        (16,040)
EQUITY DIVIDENDS PAID                                                          (2,516)                         (1,503)
                                                                               (2,029)                        (17,300)
FINANCING
Zero coupon finance                                                      -                      11,999
Exercise of warrants                                                     -                       2,233
                                                                                     -                          14,232
DECREASE IN CASH                                                               (2,029)                         (3,068)





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