REG - Crest Nicholson Hdgs - Final Results <Origin Href="QuoteRef">CRST.L</Origin> - Part 3
24/01/2017 07:06
- Part 3: For the preceding part double click ID:nRSX8953Ub
£m £m
Non-current
Revolving credit facility 200.0 206.0
Revolving credit facility issue costs (2.2) (2.9)
Other loans 5.6 7.5
203.4 210.6
Current
Other loans 1.9 7.4
There were undrawn amounts of £40.0m (2015: £34.0m) under the revolving credit facility at the statement of financial
position date. See Note 20 for additional disclosures.
17 TRADE AND OTHER PAYABLES
2016 2015
£m £m
Non-current
Land payables on contractual terms 98.7 96.0
Other payables 7.2 8.0
Accruals 5.4 1.6
111.3 105.6
Current
Land payables on contractual terms 86.3 64.4
Other trade payables 37.8 33.3
Payments on account 26.3 18.2
Taxes and social security costs 2.3 2.3
Other payables 12.6 11.1
Accruals 172.3 150.4
337.6 279.7
18 PROVISIONS
2016 2015
Rental and other obligations in respect of commercial properties £m £m
Non-current
At beginning of the year 4.1 4.0
Utilised in the year (0.5) 0.1
At end of the year 3.6 4.1
Current
At beginning of the year 1.1 2.8
Credited to the income statement - (1.6)
Utilised in the year (0.3) (0.1)
At end of the year 0.8 1.1
The rental and other obligations in respect of commercial properties provision covers the shortfall on commercial head
leases, rates and related service charges for the years the Group anticipates the leases being onerous. The Group has head
leases expiring up to September 2020.
19 SHARE CAPITAL
Shares issued Nominal value Share capital Share premium account
Number Pence £ £
Ordinary shares as at 1st November 2014 251,431,313 5 12,571,565 71,644,959
New share capital 229,887 5 11,495 15,944
Ordinary shares as at 31st October 2015 251,661,200 5 12,583,060 71,660,903
New share capital 2,702,373 5 135,119 1,349,439
Ordinary shares as at 31st October 2016 254,363,573 5 12,718,179 73,010,342
Ordinary shares are issued and fully paid.
During the year the Company issued the following new ordinary shares of 5 pence each to satisfy share options under the
Company's share incentive schemes.
Shares issued Exercise price Share capital Share premium account
Number Pence £ £
2013 LTIP 1,966,142 - 98,307 -
2014 LTIP 43,176 - 2,159 -
2015 LTIP 17,197 - 860 -
2013 SAYE 554,982 247 27,749 1,343,057
2014 SAYE 2,355 276 118 6,382
2014 Deferred bonus plan 117,448 - 5,872 -
2015 Deferred bonus plan 1,073 - 54 -
2,702,373 135,119 1,349,439
During the previous year the Company issued the following new ordinary shares of 5 pence each to satisfy share options
under the Company's share incentive schemes.
Shares issued Exercise price Share capital Share premium account
Number pence £ £
2013 LTIP 47,360 - 2,368 -
2014 LTIP 8,419 - 421 -
2013 SAYE 6,373 247 319 15,423
2014 SAYE 199 267 10 521
2013 Deferred bonus plan 160,624 - 8,031 -
2014 Deferred bonus plan 6,912 - 346 -
229,887 11,495 15,944
For details of outstanding share options at 31st October 2016 see Note 21.
20 FINANCIAL RISK MANAGEMENT
The Group's financial instruments comprise cash, bank loans, trade receivables, other financial assets and trade payables.
The main objective of the Group's policy towards financial instruments is to maximise returns on the Group's cash balances,
manage the Group's working capital requirements and finance the Group's ongoing operations.
Capital management
The Group's policies seek to match long-term assets with long-term finance and ensure that there is sufficient working
capital to meet the Group's commitments as they fall due, comply with the loan covenants and continue to sustain trading.
The Groups capital comprises shareholders' funds and net borrowings.
The Group seeks to manage its capital through control of expenditure, dividend payments and through its banking
facilities.
The revolving credit facility imposes certain minimum capital requirements on the Group. These requirements are integrated
into the Group's internal forecasting process and are regularly reviewed. The Group has, and is forecasting, to operate
within these capital requirements.
Financial risk
The main risks associated with the Group's financial instruments are credit risk, liquidity risk, market risk and interest
rate risk. The Board is responsible for managing these risks and the policies adopted are as set out below.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or other counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Group's cash deposits, as most receivables are secured
on land and buildings.
The Group has cash deposits of £282.3m (2015: £187.4m) which are held by the providers of its banking facilities. These are
primarily provided by HSBC Bank Plc, Barclays Bank Plc, Lloyds Bank Plc and The Royal Bank of Scotland, being four of the
UK's leading financial institutions. The security and suitability of these banks is monitored by the treasury function on a
regular basis.
Other financial assets, as described in Note 12, of £18.5m (2015: £24.2m) are receivables on extended terms granted as part
of a sales transaction and are secured by way of a legal charge on the relevant property and therefor credit risk is
considered low.
The carrying value of trade and other receivables is mainly amounts due from housing association sales, land sales and
commercial sales and equates to the Group's exposure to credit risk which is set out in Note 15. Amounts due from joint
ventures of £54.8m (2015: £33.9m) is funding provided on three (2015: two) joint venture developments which are being
project managed by the Group and are subject to contractual arrangements. Within trade and other receivables the other
largest single amount outstanding at the year end is £14.3m (2015: £6.2m) which is within agreed terms.
In managing risk the Group assesses the credit risk of its counter parties before entering into a transaction. No credit
limits were exceeded during the reporting year, and management does not expect any material losses from non-performance of
any counterparties, including in respect of receivables not yet due. No material financial assets are past due, or are
considered to be impaired as at the statement of financial position date (2015: none).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Cash flow forecasts are produced to monitor the expected cash flow requirements of the Group against the available
facilities. The principal risks within these cashflows relate to achieving the level of sales volume and prices in line
with current forecasts.
The following are the contractual maturities of the financial liabilities of the Group at 31st October 2016:
2016 Carrying value Contractual cash flows Within 1 year 1-2 years 2-3 years More than 3 years
£m £m £m £m £m £m
Revolving credit facility 200.0 201.4 1.4 - - 200.0
LIFF loans 7.5 8.0 2.1 2.0 2.0 1.9
Other financial liabilities carrying interest 75.5 78.0 24.0 44.5 9.5 -
Financial liabilities carrying no interest 344.8 352.8 289.3 33.7 9.8 20.0
At 31st October 2016 627.8 640.2 316.8 80.2 21.3 221.9
Get Britain Building loans and LIFF loans are development specific loans from the HCA and are repayable on the earlier of
legal completion of related units or long stop dates. Other financial liabilities carrying interest are land acquisitions
using promissory notes. The timing and amount of future cash flows given in the table above is based on the Directors' best
estimate of the likely outcome.
2015 Carrying value Contractual cash flows Within 1 year 1-2 years 2-3 years More than 3 years
£m £m £m £m £m £m
Revolving credit facility 206.0 207.6 1.6 - - 206.0
Get Britain Building loans 5.5 5.6 5.6 - - -
LIFF loans 9.4 10.2 2.2 2.1 2.0 3.9
Other financial liabilities carrying interest 73.6 77.4 29.8 23.6 24.0 -
Financial liabilities carrying no interest 291.2 302.8 235.3 31.4 14.9 21.2
At 31st October 2015 585.7 603.6 274.5 57.1 40.9 231.1
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices,
will affect the Group's income or the value of its holdings of financial instruments.
Interest rate risk
Interest rate risk reflects the Group's exposure to fluctuations to interest rates in the market. The risk arises because
the Group's revolving credit facility is subject to floating interest rates based on LIBOR, and the LIFF loans are subject
to the EU Reference rate. The Group accepts a degree of interest rate risk, and monitors rate changes to ensure they are
within acceptable limits and in line with banking covenants. For the year ended 31st October 2016 it is estimated that an
increase of 1% in interest rates applying for the full year would decrease the Group's PBT by £2.0m (2015: £1.8m).
At 31st October 2016, the interest rate profile of the financial liabilities of the Group was:
2016 2015
£m £m
Sterling bank borrowings, loan notes and long-term creditors
Floating rate financial liabilities 207.5 220.9
Financial liabilities carrying interest 75.5 73.6
Financial liabilities carrying no interest 344.8 291.2
627.8 585.7
For financial liabilities that have no interest payable but for which imputed interest is charged, consisting of land
payables, the weighted average period to maturity is 45 months (2015: 60 months).
2016 2015
£m £m
The maturity of the financial liabilities is:
Repayable within one year 310.9 266.6
Repayable between one and two years 77.3 53.2
Repayable between two and five years 232.5 48.9
Repayable after five years 7.1 217.0
627.8 585.7
Fair Values
Financial assets
The Group's financial assets comprise cash equivalents, other financial assets and trade and other receivables. The
carrying amounts of financial assets equate to their fair value. At 31st October 2016 cash equivalents consisted of
sterling cash deposits of £282.3m (2015: £187.4m), with solicitors and on current account, £18.5m (2015: £24.2m) of other
financial assets, £69.9m (2015: £47.1m) of trade, other receivables and amounts recoverable on contracts, and £54.8m (2015:
£33.9m) of amounts due from joint ventures.
Financial liabilities
The Group's financial liabilities comprise term loans, other loans, trade payables, payments on account, loans from joint
ventures and accruals. The carrying amount of the revolving credit facility, other loans, trade payables, payments on
account, loans from joint ventures and accruals equate to their fair value. The fair values of the revolving credit
facility, other loans and loan notes are calculated based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the statement of financial position date.
The fair values of the facilities determined on this basis are:
2016 Nominal interest rate Facevalue Carrying value Fair value Maturity
£m £m £m
Revolving credit facility 3 mth LIBOR + 2.15% 200.0 200.0 200.0 2020
LIFF loans EU reference rate + 2.2% 5.6 5.6 5.6 2019
Total non-current interest-bearing loans 205.6 205.6 205.6
LIFF loans EU reference rate + 2.2% 1.9 1.9 1.9 2017
Total current interest-bearing loans 1.9 1.9 1.9
2015 Nominal interest rate Facevalue Carrying value Fair value Maturity
£m £m £m
Revolving credit facility 3 mth LIBOR + 2.5% 206.0 206.0 206.0 2020
LIFF loans EU reference rate + 2.2% 7.5 7.5 7.5 2019
Total non-current interest bearing loans 213.5 213.5 213.5
Get Britain Building loans EU reference rate + 2.2% to 4.0% 5.5 5.5 5.5 2016
LIFF loans EU reference rate + 2.2% 1.9 1.9 1.9 2016
Total current interest bearing loans 7.4 7.4 7.4
Financial assets and liabilities by category
2016 2015
Financial assets £m £m
Sterling cash deposits 282.3 187.4
Trade receivables 44.1 25.6
Amounts due from joint ventures 54.8 33.9
Recoverable on contracts 21.0 13.6
Other receivables 4.8 7.9
Total loans and receivables 407.0 268.4
Other financial assets 18.5 24.2
Total financial assets 425.5 292.6
2016 2015
Financial liabilities £m £m
Revolving credit facility 200.0 206.0
Other loans 7.5 14.9
Land payments on contractual terms 185.0 160.4
Other trade payables 37.8 33.3
Other payables 19.8 19.1
Accruals 177.7 152.0
Financial liabilities at amortised cost 627.8 585.7
21 EMPLOYEE BENEFITS
(a) Retirement benefit obligations
Defined contribution scheme
The Group operates a defined contribution scheme for new employees. The assets of the scheme are held separately from those
of the Group in an independently administered fund. The contributions to this scheme for the year were £2.0m (2015: £1.9m).
At the statement of financial position date there were no outstanding or prepaid contributions (2015: £nil).
Defined benefit scheme
The Company sponsors the Crest Nicholson Group Pension and Life Assurance Scheme, a funded DB Scheme in the UK. The Scheme
is administered within a trust that is legally separate from the Company. Trustees are appointed by both the Company and
the scheme's members and act in the interest of the scheme and all relevant stakeholders, including the members and the
Company. The Trustees are also responsible for the investment of the scheme's assets.
The scheme closed to future accrual from 30th April 2010. Accrued pensions in relation to deferred members are revalued at
statutory revaluation in the period before retirement. Benefits also increase either at a fixed rate or in line with
inflation while in payment. The scheme provides pensions to members on retirement and to their dependants on death.
The Company pays contributions in relation to the funding deficit as determined by regular actuarial valuations. The
Trustees are required to use prudent assumptions to value the liabilities and costs of the scheme, whereas the accounting
assumptions must be best estimates.
Responsibility for making good any deficit within the scheme lies with the Company and this introduces a number of risks
for the Company. The major risks are: interest rate risk, inflation risk, investment risk and longevity risk. The Company
and Trustees are aware of these risks and manage them through appropriate investment and funding strategies.
The scheme is subject to regular actuarial valuations, which are usually carried out every three years. The last actuarial
valuation was carried out with an effective date of 31st January 2015. These actuarial valuations are carried out in
accordance with the requirements of the Pensions Act 2004 and so include deliberate margins for prudence. This contrasts
with these accounting disclosures, which are determined using best estimate assumptions.
The results of the actuarial valuation as at 31st January 2015 have been projected to 31st October 2016 by a qualified
independent actuary. The figures in the following disclosure were measured using the Projected Unit Method.
The investment strategy in place for the scheme is to invest in a mix of return seeking, index linked and fixed interest
investments. At 31st October 2016, the allocation of the scheme's invested assets was 75% in return seeking investments, 5%
in corporate bonds, 19% in index linked gilts and 1% in cash. Details of the investment strategy can be found in the
scheme's Statement of Investment Principles, which the Trustees update as the policy evolves.
2016£m 2015£m 2014£m
The amounts recognised in the statement of financial position are as follows:
Present value of scheme liabilities (200.9) (165.3) (173.4)
Fair value of scheme assets 184.2 157.8 149.7
Net amount recognised at year end (16.7) (7.5) (23.7)
A deferred tax asset of £3.1m (2015: £1.4m) has been recognised in the consolidated statement of financial position.
The amounts recognised in comprehensive income are:
The current and past service costs, settlements and curtailments, together with the net interest expense for the year,
where applicable, are included in the consolidated statement of comprehensive income. Remeasurements of the net defined
benefit liability are included in other comprehensive income.
2016£m 2015£m
Administration expenses 0.5 0.5
Net interest expense 0.1 0.8
Charge recognised in the consolidated income statement 0.6 1.3
Remeasurements of the net liability
Return on scheme assets (18.0) 1.6
Loss arising from changes in financial assumptions 37.0 1.2
Loss/(gain) arising from changes in demographic assumptions 1.0 (7.1)
Experience gain (2.4) (4.2)
Charge/(credit) recorded in the consolidated statement of comprehensive income 17.6 (8.5)
Total defined benefit scheme cost/(credit) 18.2 (7.2)
The principal actuarial assumptions used were: 2016% 2015%
Liability discount rate 2.8 3.9
Inflation assumption - RPI 3.5 3.2
Inflation assumption - CPI 2.7 2.4
Rate of increase in salaries - -
Revaluation of deferred pensions 2.7 2.4
Increases for pensions in payment
benefits accrued in respect of GMP 3.0 3.0
benefits accrued in excess of GMP pre-1997 3.0 3.0
benefits accrued post-1997 3.3 3.1
2016% 2015%
Proportion of employees opting for early retirement - -
Proportion of employees commuting pension for cash 100.0 100.0
2016 2015
Mortality assumption - pre-retirement AC00 AC00
Mortality assumption - male post-retirement SAPS S2 PMA SAPS S2 PMA
CMI_2014 CMI_2014
ltr 1.5% ltr 1.5%
Mortality assumption - female post-retirement SAPS S2 PFA SAPS S2 PFA
CMI_2014 CMI_2014
ltr 1.5% ltr 1.5%
2016 Years 2015Years
Future expected lifetime of current pensioner at age 65
Male aged 65 at year end 22.7 22.6
Female age 65 at year end 24.8 24.7
Future expected lifetime of future pensioner at age 65
Male aged 45 at year end 24.9 24.7
Female age 45 at year end 27.1 27.0
Changes in the present value of assets over the year
2016£m 2015£m
Fair value of assets at beginning of the year 157.8 149.7
Interest income 6.2 6.0
Return on assets (excluding amount included in net interest expense) 18.0 (1.6)
Contributions from the employer 9.0 9.0
Benefits paid (6.3) (4.8)
Administration expenses (0.5) (0.5)
Fair value of assets at end of the year 184.2 157.8
Changes in the present value of liabilities over the year
2016£m 2015£m
Liabilities at beginning of the year 165.3 173.4
Interest cost 6.3 6.8
Remeasurement losses/(gains)
Actuarial losses arising from changes in financial assumptions 37.0 1.2
Actuarial losses/(gains) arising from changes in demographic assumptions 1.0 (7.1)
Experience gains (2.4) (4.2)
Benefits paid (6.3) (4.8)
Liabilities at end of the year 200.9 165.3
The split of the scheme's liabilities by category of membership is as follows: 2016£m 2015£m
Pensions in payment 79.9 71.2
Deferred pensioners 121.0 94.1
200.9 165.3
2016 Years 2015 Years
Average duration of the scheme's liabilities at the end of the year 18.0 17.0
This can be subdivided as follows:
Deferred pensioners 23.0 21.0
Pensions in payment 12.0 12.0
The major categories of scheme assets are as follows:
2016£m 2015£m
Return seeking
UK Equities 15.4 13.7
Overseas Equities 31.6 23.7
Other (hedge funds, multistrategy and absolute return funds) 81.4 76.2
128.4 113.6
Debt instruments
Corporates 9.3 6.7
Index linked 35.2 26.4
44.5 33.1
Other
Cash 2.5 2.6
Insured annuities 8.8 8.5
11.3 11.1
Total market value of assets 184.2 157.8
All scheme assets with the exception of cash and insured annuities are quoted assets. The scheme has no investments in the
Group or in property occupied by the Group. The Group expects to contribute £0.75m per month until 30th November 2017, and
£0.75m per month from 1st December 2017 until 31st August 2021, subject to scheme funding. The Group expects to contribute
£9.0m (2015: £9.0m) to scheme funding in the year ending 31st October 2017.
Sensitivity of the liability value to changes in the principal assumptions
If the discount rate was 0.25% higher/(lower), the scheme's liabilities would decrease by £8.7m (increase by £9.4m) if all
the other assumptions remained unchanged.
If the inflation assumption was 0.25% higher/(lower), the scheme's liabilities would increase by £4.6m (decrease by £5.0m)
if all the other assumptions remained unchanged.
If life expectancies were to increase by 1 year, the scheme's liabilities would increase by £8.2m if all the other
assumptions remained unchanged.
(b) Share-based payments
The Group operates an LTIP, employee share option scheme (ESOS), SAYE and a deferred bonus plan. Expected volatility for
all plans/schemes for the current and previous year (where applicable) is based on the historical share price movements of
Crest Nicholson Holdings plc since the Company listed in February 2013.
Long-term incentive plan
The Group's LTIP is open to the Executive Directors and senior management with awards being made at the discretion of the
Remuneration Committee. Awards under the plan vest over three years and are subject to three years' service, and return on
capital and profit performance conditions. Options granted under the plan are exercisable between three and 10 years after
the date of grant. Awards may be satisfied by shares held in the employee benefit trust (EBT), the issue of new shares
(directly or to the EBT) or the acquisition of shares in the market.
Date of grant 8th Mar 2013 14th Feb 2014 27th Feb 2015 26th Feb 2016 10th Mar 2016
Options granted 2,226,041 1,246,861 1,270,176 1,075,943 50,336
Fair value at measurement date £2.62 £3.49 £4.02 £5.07 £5.03
Share price on date of grant £2.80 £3.81 £4.45 £5.62 £5.03
Exercise price £0.00 £0.00 £0.00 £0.00 £0.00
Vesting period 3 years 3 years 3 years 3 years N/A
Expected dividend yield 2.50% 2.50% 3.20% 3.50% N/A
Expected volatility 33.00% 28.90% 30.00% 30.00% N/A
Risk free interest rate 0.40% 0.40% 0.86% 0.43% N/A
Valuation model Binomial Binomial Binomial Binomial N/A
Contractual life from 8th Mar 2013 14th Feb 2014 27th Feb 2015 26th Feb 2016 10th Mar 2016
Contractual life to 7th Mar 2023 13th Feb 2024 26th Feb 2025 25th Feb 2026 7th Mar 2023
Number of options Number of options Number of options Number of options Number of options Total number of options
Movements in the year
Outstanding at 1st November 2014 2,026,405 1,200,020 - - - 3,226,425
Granted during the year - - 1,270,176 - - 1,270,176
Exercised during the year (47,360) (8,419) - - - (55,779)
Lapsed during the year (50,334) (89,487) (49,341) - - (189,162)
Outstanding at 31st October 2015 1,928,711 1,102,114 1,220,835 - - 4,251,660
Granted during the year - - - 1,075,943 50,336 1,126,279
Exercised during the year (1,915,806) (43,176) (17,197) - (50,336) (2,026,515)
Lapsed during the year (12,905) (100,849) (173,500) (81,654) - (368,908)
Outstanding at 31st October 2016 - 958,089 1,030,138 994,289 - 2,982,516
Exercisable at 31st October 2016 - - - - - -
Exercisable at 31st October 2015 - - - - - -
£m £m £m £m £m Total £m
Charge to income for the current year 0.5 1.1 1.3 0.2 0.3 3.4
Charge to income for the prior year 1.7 1.2 0.7 - - 3.6
The weighted average exercise price of LTIP options was £nil (2015: £nil).
Employee share option scheme
This is a limited scheme which represents the balance of shares from the previous management incentive plan, which vested
at admission. The balance of shares are held by the Group's Employee Share Ownership Trust and certain options have been
granted to Executive Directors and other employees. Options granted under the plan are exercisable between two and 10 years
after the date of grant. The options are valued at the admission price or share price on date of grant. There are no
performance criteria but recipients must remain employed by the Group on the applicable vesting date.
Date of grant 6th Mar 2013 17th Aug 2015
Options granted 615,000 1,500
Fair value at measurement date £0.00 £0.00
Share price on date of grant £2.69 £5.68
Exercise price £0.00 £0.00
Vesting period 3 years 2 years
Expected dividend yield N/A N/A
Expected volatility N/A N/A
Risk free interest rate N/A N/A
Valuation model N/A N/A
Contractual life from 6th Mar 2013 17th Aug 2015
Contractual life to 5th Mar 2023 16th Aug 2025
Movements in the year Number of options Number of options Total number of options
Outstanding at 1st November 2014 539,000 - 539,000
Granted during the year - 1,500 1,500
Exercised during the year (539,000) - (539,000)
Outstanding at 31st October 2015 - 1,500 1,500
Outstanding at 31st October 2016 - 1,500 1,500
Exercisable at 31st October 2016 - - -
Exercisable at 31st October 2015 - - -
£m £m Total £m
Charge to income for the current year - - -
Charge to income for the prior year 0.3 - 0.3
The weighted average exercise price of employee share options was £nil (2015: £nil).
Save as You Earn
Executive Directors and eligible employees are invited to make regular monthly contributions to a Sharesave scheme operated
by Equiniti. On completion of the three-year contract period employees are able to purchase ordinary shares in the Company
based on the market price at the date of invitation less a 20% discount. There are no performance conditions.
Date of grant 22nd May 2013 15th Jul 2014 16th Jul 2015 1st Aug 2016
Options granted 805,805 569,998 257,264 1,208,742
Fair value at measurement date £0.82 £0.70 £1.03 £1.11
Share price on date of grant £3.09 £3.44 £5.63 £3.56
Exercise price £2.47 £2.76 £4.51 £2.86
Vesting period 3 years 3 years 3 years 3 years
Expected dividend yield 2.50% 2.50% 3.00% 4.80%
Expected volatility 32.00% 28.90% 29.00% 45.00%
Risk free interest rate 0.55% 1.61% 1.16% 0.19%
Valuation model Binomial Binomial Binomial Binomial
Contractual life from 1st Aug 2013 1st Aug 2014 1st Aug 2015 1st Sep 2016
Contractual life to 1st Feb 2017 1st Feb 2018 1st Feb 2019 1st Mar 2020
Movements in the year Number of options Number of options Number of options Number of options Total number of options Weighted average exercise Price
Outstanding at 1st November 2014 695,720 559,697 - - 1,255,417 £2.60
Granted during the year - - 257,264 - 257,264 £4.51
Exercised during the year (6,373) (199) - - (6,572) £2.48
Lapsed during the year (72,233) (91,804) (9,974) - (174,011) £2.74
Outstanding at 31st October 2015 617,114 467,694 247,290 - 1,332,098 £2.95
Granted during the year - - - 1,208,742 1,208,742 £2.86
Exercised during the year (554,982) (2,355) - - (557,337) £2.47
Lapsed during the year (25,195) (44,264) (142,812) (14,472) (226,743) £3.84
Outstanding at 31st October 2016 36,937 421,075 104,478 1,194,270 1,756,760 £2.93
Exercisable at 31st October 2016 36,937 - - - 36,937
Exercisable at 31st October 2015 - - - - -
£m £m £m £m Total £m
Charge to income for the current year 0.1 0.1 - 0.1 0.3
Charge to income for the prior year 0.2 0.1 - - 0.3
Deferred bonus plan
Under the terms of certain bonus schemes, some parts of bonus payments must be deferred into share options. The options
carry no performance criteria and vest over one or three years. Options granted under the plan are exercisable between one
and 10 years after the date of grant. Deferred bonus plan option numbers are based on the share price on date of grant.
Date of grant 14th Feb 2014 27th Feb 2015 26th Feb 2016 10th Mar 2016
Options granted 155,752 257,219 140,185 3,861
Fair value at measurement date £3.81 £4.45 £5.62 £5.03
Share price on date of grant £3.81 £4.45 £5.62 £5.03
Exercise price £0.00 £0.00 £0.00 £0.00
Vesting period 3 years 1 / 3 years 1 / 3 years 1 year
Expected dividend yield and volatility N/A N/A N/A N/A
Risk free interest rate N/A N/A N/A N/A
Valuation model N/A N/A N/A N/A
Contractual life from 14th Feb 2014 27th Feb 2015 26th Feb 2016 10th Mar 2016
Contractual life to 13th Feb 2024 26th Feb 2025 25th Feb 2026 26th Feb 2025
Movements in the year Number of options Number of options Number of options Number of options Total number of options
Outstanding at 1st November 2014 155,752 - - - 155,752
Granted during the year 4,872 257,219 - - 262,091
Exercised during the year (160,624) (6,912) - - (167,536)
Lapsed during the year - (5,959) - - (5,959)
Outstanding at 31st October 2015 - 244,348 - - 244,348
Granted during the year - - 140,185 3,861 144,046
Exercised during the year - (113,587) (1,073) (3,861) (118,521)
Lapsed during the year - (10,242) (11,440) - (21,682)
Outstanding at 31st October 2016 - 120,519 127,672 - 248,191
Exercisable at 31st October 2016 - - - - -
Exercisable at 31st October 2015 - - - - -
£m £m £m £m Total £m
Charge to income for the current year - 0.2 0.5 - 0.7
Charge to income for the prior year 0.1 0.7 - - 0.8
The weighted average exercise price of deferred bonus plan share options was £nil (2015: £nil).
Total Share Incentive Schemes 2016 2015
Movements in the year Number of options Number of options
Outstanding at beginning of the year 5,829,606 5,176,594
Granted during the year 2,479,067 1,791,031
Exercised during the year (2,702,373) (768,887)
Lapsed during the year (617,333) (369,132)
Outstanding at end of the year 4,988,967 5,829,606
Exercisable at end of the year 36,937 -
£m £m
Charge to income for the year 4.4 5.0
The weighted average share price at the date of exercise of share options exercised during the year was £5.01 (2015:
£4.08).
The options outstanding had a range of exercise prices of £nil to £4.51 (2015: £nil to £4.51) and a weighted average
remaining contractual life of 6.3 years (2015: 5.7 years)
22 CONTINGENT LIABILITIES AND COMMITMENTS
There are performance bonds and other engagements, including those in respect of joint venture partners, undertaken in the
ordinary course of business from which it is anticipated that no material liabilities will arise.
In the ordinary course of business the Group enters into certain land purchase contracts with vendors on a conditional
exchange basis. The conditions must be satisfied for the Group to recognise the land asset and corresponding liability
within the statement of financial position. No contingent liability in respect of conditional land acquisitions has been
recognised.
The Group provides for all known material legal actions, where having taken appropriate legal advice as to the likelihood
of success of the actions, it is considered probable that an outflow of economic resource will be required, and the amount
can be reliably measured. No contingent liability in respect of such claims has been recognised.
23 OPERATING LEASES
Outstanding commitments for future minimum lease payments under non-cancellable operating leases were:
2016 2015
£m £m
Land and
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