Shires Income PLC – Annual Financial Report

SHIRES INCOME PLC

ANNUAL FINANCIAL RPORT FOR THE YEAR ENDED 31 MARCH 2018

Legal Entity Identifier (LEI): 549300HVCIHNQNZAYA89

The Company

Shires Income PLC (the “Company”) is an investment trust. Its Ordinary shares are listed on the premium segment of the London Stock Exchange.

Investment Objective

The Company's investment objective is to provide shareholders with a high level of income, together with the potential for growth of both income and capital from a diversified portfolio substantially invested in UK equities but also in preference shares, convertibles and fixed income securities.

Benchmark

FTSE All-Share Index (Total Return).

Management

The Company's Manager is Aberdeen Fund Managers Limited (“AFML”, the “AIFM” or the “Manager”) which has delegated the investment management of the Company to Aberdeen Asset Managers Limited (“AAML” or the “Investment Manager”). Both companies are wholly owned subsidiaries of Standard Life Aberdeen plc, which was formed by the merger of Aberdeen Asset Management PLC and Standard Life plc on 14 August 2017.

Website

Up to date information can be found on the Company's website: www.shiresincome.co.uk

COMPANY OVERVIEW – FINANCIAL HIGHLIGHTS

For further information, please contact:

Colin Edge

Aberdeen Asset Managers Limited        0207 463 5881 *

* Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.

COMPANY OVERVIEW – CHAIRMAN'S STATEMENT

Performance

In my first year as Chairman of your Company, I am pleased to report on another year of positive performance.

During the year ended 31 March 2018, the Company's net asset value per share increased by 3.3% on a total return basis, compared to a total return from our benchmark, the FTSE All-Share Index, of 1.2%. The share price total return was 12.2%, following a significant re-rating of the Company's shares which is described in more detail below.

The Company's out-performance came mainly from its preference shares, which generated a total return of 12.2%, while the equity portfolio produced a total return of 1.4%. Within the equity portfolio, it was the Company's exposure to smaller companies, through its holding in Aberdeen Smaller Companies Income Trust PLC, that made the most positive contribution to performance.

Political events dominated sentiment in the UK during the first part of the financial year, with the loss of the Conservative Party's majority in the General Election in June and the progression of Brexit negotiations. Markets reacted quite calmly during this period with returns from equities muted during the first half of the financial year. Markets then rallied towards the end of 2017, with the FTSE All-Share Index reaching an all-time high in January, driven in part by the announcement of significant reform of tax policy in the US which was warmly received by investors. Smaller companies performed particularly well in 2017. However, there was a sell-off in markets during the final three months of the financial year, with the FTSE All-Share Index falling by 6.9% in total return terms during that period as investors become concerned about the timing of future interest rates rises in the UK, the potential for other Central Banks to start removing the exceptional monetary stimulus which has been in place, and moves by the US to address global trading relationships and in particular the potential for increased tariffs against China, the European Union and other nations.

More detail on markets and the Company's performance for the year are covered in the Investment Manager's Review.