Interim Results

Shires Income PLC
29 November 2001

News Release

29 November 2001

Shires Income plc

Interim Results for the six months to 30 September 2001

Shires Income plc, with total assets of £133.7 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.

                                                      30 September     31 March
                                                              2001         2001
Total assets less current liabilities                      £133.7m      £164.6m
Ordinary shareholders' funds                                £94.9m      £126.0m
Net asset value per ordinary share                          320.0p       425.1p
Ordinary share price                                        350.5p       413.0p
Premium/(Discount)                                            9.5%       (2.8)%
Revenue return per ordinary share                            8.11p      10.10p*
Dividends per ordinary share                                 8.80p       8.70p*

*Half year to 30 September 2000

*         Total return to shareholders was -13.0%, compared with a return of -
12.5% on the FTSE All-Share Index.

*         Total return on net assets was -22.7%, due to weakness of ordinary
share prices, a lower valuation of the holding in Glasgow Investment Managers
and the effect of gearing. The return from 30 September to 22 November 2001
was +11.5% and the net asset value at the latter date was 354.2p.

*         Relationship of ordinary share price to underlying net asset value
per ordinary share moved from a discount of 2.8% at 31 March 2001 to a premium
of 9.5% at 30 September 2001.

*         Second interim dividend of 4.4p has been declared, making total
dividends of 8.8p for the period to 30 September 2001 compared with 8.7p for
the corresponding period last year.

*         Securities markets have been preoccupied with current events and
appear oblivious to the stimuli being applied to the major economies, through
lower oil prices, interest rate cuts and fiscal relaxation. The Board
considers that the current level of the stockmarket represents an opportunity
for the long-term investor.

For further information please contact:

David Williams, Managing Director

Glasgow Investment Managers                          0141 572 2700

Chairman's Statement

Background

During the half year under review the representative indices of ordinary share
prices rallied in April and May after the setback in March, before moving
steadily lower as the economic forecasts became more gloomy.  Then business,
consumer and investor confidence was badly damaged in September by the
terrorist attacks on New York and Washington, which threatened to frustrate
the efforts of the monetary authorities in the USA, Europe and the UK to avoid
recession.

Investment Returns

The total return on net assets was -22.7%, which compares with a return of
-12.5% on the FTSE All-Share Index, the Company's benchmark.  This
disappointing return reflects the impact of three major features of the
Company's portfolio.

First, the stocks in the portfolio were selected to benefit from the recovery
in business activity which may have been deferred by terrorist attacks in the
USA but which the Managers expect to result from the various economic stimuli
now in place.

Second, the high gearing in place, which is expected to benefit investment
performance as ordinary share prices recover, had an adverse impact when they
fell.

Third, the valuation of the Company's holding in Glasgow Investment Managers
was reduced from £7.4 million to £5.4 million, reflecting a fall in the
average rating of similar companies listed on the stockmarket and the adverse
impact of the recent lower levels of security prices on earnings from managing
investment portfolios.

The total return to shareholders, at -13.0%, was much better than the return
on net assets because the relationship of the ordinary share price to
underlying net asset value per ordinary share moved from a discount of 2.8% at
31 March 2001 to a premium of 9.5% at 30 September 2001.

As the events of September become more distant, ordinary share prices have
begun to recover.  The Company's total return on net assets in the period from
end-September to 22 November 2001 was +11.5%, which compares with the return
of +10.4% on the All-Share Index, and the net asset value per ordinary share
at that date was 354.2p.

Portfolio Profile

Over the six months to 30 September 2001, gearing rose from 37.1% to 51.1%,
largely as a result of the fall in value of equity investments as the UK
stockmarket weakened but also partly due to additional investment in ordinary
shares at lower prices financed by short-term borrowings.  Equity investments,
including convertible and unquoted securities, represented 143.2% of net
assets at 30 September 2001, up from 130.9% at 31 March 2001.

As announced on 17 August 2001, the Company introduced hedging of the UK
equity portfolio and the hedge position at 30 September 2001 is reflected in
these interim figures. Since the recovery in the stockmarket, the position has
been reduced.

Earnings and Dividends

The revenue return of 8.1p per ordinary share is down from 10.1p in the first
half last year, due to lower income from investments, including lower dividend
receipts from Glasgow Investment Managers.

A second interim dividend of 4.4p has been declared, to be paid on 31 January
2002 to shareholders on the register at close of business on 11 January 2002.
A first interim dividend of 4.4p was paid on 31 October 2001 and dividends
paid and declared to date for the current year total 8.8p per share against
8.7p last year.

Board

I am sorry to have to report to you that John Harrison, a director of the
Company since 1995, died suddenly in July.  His contribution to the Board's
deliberations will be sadly missed.

On a happier note, Hamish Buchan joined the Board after the Annual General
Meeting in June.  Hamish has been a well known and highly respected
commentator on the investment trust industry for many years and I should like
to extend a warm welcome to him.

Outlook

Securities markets have been preoccupied with current events - the threat of
recession, military action in Afghanistan and the anthrax scares in the USA -
and appear oblivious to the stimuli being applied to the major economies.  Oil
prices have fallen, interest rates have been cut and the fiscal balances of
all the Western governments are moving rapidly towards deficit, all factors
likely to boost business activity when confidence begins to return.  The Board
considers that the current level of the stockmarket represents an opportunity
for the long-term investor.

The Interim Report will be posted to shareholders on 5 December 2001.  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 2001

                           Half year to 30 September      Half year to 30
                                     2001                 September 2000
                                  (unaudited)               (unaudited)
                          Revenue   Capital     Total  Revenue  Capital   Total
                             £000      £000      £000     £000     £000    £000

Net losses on investments       -  (30,495)  (30,495)        -  (1,232) (1,232)
Income                      3,679         -     3,679    4,171        -   4,171
Investment management fee   (157)     (157)     (314)    (165)    (165)   (330)
Other administrative        (156)         -     (156)    (184)        -   (184)
expenses
Net return before finance
costs and taxation          3,366  (30,652)  (27,286)    3,822  (1,397)   2,425
Part disposal of                -         -         -        -     (82)    (82)
subsidiary undertaking
Finance costs of            (988)     (328)   (1,316)    (888)    (469) (1,357)
borrowings
Return on ordinary
activities
before taxation             2,378  (30,980)  (28,602)    2,934  (1,948)     986
Taxation                     (27)         -      (27)     (60)        -    (60)
Return on ordinary
activities
after taxation for the      2,405  (30,980)  (28,575)    2,994  (1,948)   1,046
period
Preference dividend             1         -         1        1        -       1
Return attributable to
equity shareholders         2,404  (30,980)  (28,576)    2,993  (1,948)   1,045
Dividends on equity         2,612         -     2,612    2,579        -   2,579
shares
Transfer (from)/to          (208)  (30,980)  (31,188)      414  (1,948) (1,534)
reserves

Returns per ordinary        8.11p (113.44)p (105.33)p   10.10p  (6.57)p   3.53p
share
Dividends per ordinary      8.80p                        8.70p
share


Consolidated Statement of Total Return
(incorporating the Revenue Account)
for the half year ended 30 September 2001

                                                   Year to 31 March 2001
                                                         (audited)
                                              Revenue       Capital       Total
                                                 £000          £000        £000
Net losses on investments                           -       (6,529)     (6,529)
Income                                          8,040             -       8,040
Investment management fee                       (322)         (322)       (644)
Other administrative expenses                   (353)             -       (353)
Net return before finance
costs and taxation                              7,365       (6,851)         514
Part disposal of subsidiary undertaking             -          (82)        (82)
Finance costs of borrowings                   (1,779)       (1,368)     (3,147)
Return on ordinary activities
before taxation                                 5,586       (8,301)     (2,715)
Taxation                                        (129)             -       (129)
Return on ordinary activities
after taxation for the period                   5,715       (8,301)     (2,586)
Preference dividend                                 2             -           2
Return attributable to
equity shareholders                             5,713       (8,301)     (2,588)
Dividends on equity shares                      5,633             -       5,633
Transfer to/(from) reserves                        80       (8,301)     (8,221)

Returns per ordinary share                     19.27p      (28.00)p     (8.73)p
Dividends per ordinary share                   19.00p




Group Balance Sheet and Distribution of Assets

as at 30 September 2001


                                                             Net
                        30 September    31 March 2001  purchases  Appreciation/
                            2001                               /
                         (unaudited)      (audited)      (sales) (Depreciation)
                           £000      %     £000      %      £000           £000
Listed investments
  Ordinary shares       120,854  127.2  146,991  116.6     1,287       (27,424)
  Convertibles            9,335    9.8   10,120    8.0         -          (785)
  Other fixed interest    7,465    7.9    7,850    6.2         -          (385)
                        137,654  144.9  164,961  130.8     1,287       (28,594)
Unlisted investments      5,940    6.2    7,947    6.3         -        (2,007)
                        143,594  151.1  172,908  137.1     1,287       (30,601)
Hedge instruments            70    0.1        -      -         -             70
(net)
                        143,664  151.2  172,908  137.1     1,287       (30,531)
Net current assets/     (9,939) (10.5)  (8,310)  (6.6)
(liabilities)
Total assets (less      133,725  140.7  164,598  130.5
current liabilities)
Index-Linked Debenture (38,715) (40.7) (38,517) (30.5)
Stocks
Net assets               95,010  100.0  126,081  100.0
Capital and Reserves

Called up share          14,888          14,874
capital
Share premium account    20,348          20,276
Other capital reserves
  Realised               73,644          70,004
  Unrealised           (17,494)          17,095
Revenue reserves
  Realised                3,348           3,556
  Unrealised                276             276
                         95,010         126,081

Net asset value per      320.0p          425.1p

  ordinary share

Note: These are not statutory accounts under section 240 of the Companies Act
1985 and are unaudited.  The information relating to the group balance sheet
as at 31 March 2001 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 Act.


Consolidated Cash Flow Statement

for the half year ended 30 September 2001


                                          Half year to Half year to    Year to
                                          30 September 30 September   31 March
                                                  2001         2000       2001
                                           (unaudited)  (unaudited)  (audited)
                                                  £000         £000       £000
Net cash inflow from operating activities        4,202        2,881      6,372

Servicing of finance                           (1,289)        (900)    (1,831)
Taxation                                             -          341        451

Investing activities

Purchases of investments                      (24,131)     (23,363)   (45,251)
Sales of investments                            21,587       22,610     41,297
Net cash inflow from hedge instruments          11,340            -          -
                                                 8,796        (753)    (3,954)
Acquisitions and disposals

Net cash disposed of with subsidiary                 -      (2,224)    (2,224)
Equity dividends paid                          (3,054)      (2,980)    (5,559)

Net cash inflow/(outflow) before                 8,655      (3,635)    (6,745)
financing

Financing

Issues of ordinary shares                          117            -          -
Expenses of Debenture issue                          -            -       (27)
Debt due within one year
- increase in short-term borrowings              4,000        2,001      2,490
- (decrease)/increase in bank overdrafts       (1,677)        (490)        859
Increase/(Decrease) in cash                     11,095      (2,124)    (3,423)




Analysis of Changes in Net Debt


                                             At              Other           At
                                       31 March     Cash  non-cash 30 September
                                           2001    flows   changes         2001
                                           £000     £000      £000         £000
Cash at bank and in hand                    151   11,095         -       11,246
Bank overdrafts                         (1,679)    1,677         -          (2)
Short-term borrowings                   (4,500)  (4,000)         -      (8,500)
5% Index-Linked Debenture 2008/10      (23,223)        -     (138)     (23,361)
3.4375% Index-Linked Debenture 2017/   (15,294)        -      (60)     (15,354)
19
                                       (44,545)    8,772     (198)     (35,971)