REG - Crest Nicholson Hdgs - Final Results <Origin Href="QuoteRef">CRST.L</Origin> - Part 3
26/01/2016 07:10
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£m £m
Non-current
Revolving credit facility 206.0 135.0
Revolving credit facility issue costs (2.9) (2.4)
Other loans 7.5 14.1
210.6 146.7
Current
Other loans 7.4 14.6
There were undrawn amounts of £34.0m (2014: £65.0m) under the revolving credit facility at the statement of financial
position date. See Note 20 for additional disclosures.
16 TRADE AND OTHER PAYABLES
2015 2014
£m £m
Non-current
Land payables on contractual terms 96.0 82.4
Other payables 8.0 -
Accruals 1.6 0.5
105.6 82.9
Current
Land payables on contractual terms 64.4 104.4
Other trade payables 33.3 30.0
Payments on account 18.2 17.5
Due to joint ventures - 3.8
Taxes and social security costs 2.3 1.6
Other payables 11.1 20.7
Accruals 150.4 115.1
279.7 293.1
During the year the Group clarified its description of land payables on contractual terms to only include direct land
vendor liabilities. Other indirect land related liabilities (mainly s106 obligations) have been classified within accruals.
2014 comparatives have been reclassified resulting in a move of £27.7m from land payables on contractual terms to accruals;
total payables are unchanged.
17 DEFERRED TAX ASSETS
2015 2014
£m £m
At beginning of the year 40.3 58.1
Income statement movements (17.7) (17.9)
Equity movements (1.7) 0.1
At end of the year 20.9 40.3
2015 2014
£m £m
The deferred tax asset comprises:
Tax losses 1.1 13.9
Inventories fair value 14.3 19.9
Share-based payments 3.3 1.2
Other temporary differences 0.8 0.5
Pension deficit 1.4 4.8
Deferred tax asset 20.9 40.3
At the statement of financial position date the substantively enacted future corporation tax rates were 20% (FY2015 to
FY2016), 19% (FY2017 to FY2019) and 18% beyond. The deferred tax assets have been evaluated at the rates at which they are
expected to reverse based on current forecasts (accounting period ends: 31st October 2016: 20%, 31st October 2017: 19.42%,
31st October 2018: 19%, 31st October 2019: 19%, 31st October 2020: 18.42% and 31st October 2021 and subsequent: 18%).
Inventories fair value represents temporary differences on the carrying value of inventory fair valued on the acquisition
of Castle Bidco Limited in 2009. These temporary differences are expected to be recoverable in full and are therefore
recognised as deferred tax assets in the above amounts.
The Directors believe that future taxable profits will be sufficient to fully utilise the deferred tax losses.
18 PROVISIONS
Rental and other obligations in respect of commercial properties Other Total
£m £m £m
Non-current
At 31st October 2013 4.1 - 4.1
Utilised in the year (0.1) - (0.1)
At 31st October 2014 4.0 - 4.0
Charged to the income statement 0.1 - 0.1
At 31st October 2015 4.1 - 4.1
Current
At 31st October 2013 2.5 2.2 4.7
Charged/(credited) to the income statement 0.3 (2.2) (1.9)
At 31st October 2014 2.8 - 2.8
Credited to the income statement (1.6) - (1.6)
Utilised in the year (0.1) - (0.1)
At 31st October 2015 1.1 - 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 period the Group anticipates the lease being onerous. The Group has head
leases expiring up to September 2020. Other provisions relate to the unwind of investment fair value on joint ventures that
arose on the acquisition of Castle Bidco Limited in 2009 and unwound fully in the prior year.
19 SHARE CAPITAL
Shares issued Number Nominal value Pence Share capital £ Share premium account £
Ordinary shares as at 31st October 2013 251,427,287 5 12,571,364 71,635,216
New share capital 4,026 5 201 9,743
Ordinary shares as at 31st October 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
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 Number Exercise price pence Share capital £ Share premium account £
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
During the previous year the Company issued 4,026 new ordinary shares of 5 pence each to satisfy share options under the
Save as You Earn (SAYE) scheme which became exercisable at a price of 247 pence per share.
For details of outstanding share options at 31st October 2015 see Note 21.
20 FINANCIAL RISK MANAGEMENT
The Group's financial instruments comprise cash, bank loans and overdrafts, 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 £187.4m (2014: £142.0m) which are held by 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 treasury on a regular
basis.
Other financial assets, as described in Note 12, of £24.2m (2014: £28.4m) 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 therefore credit risk is
considered low.
The carrying value of trade and other receivables are mainly amounts due from housing association sales, land sales and
commercial sales and equate to the Group's exposure to credit risk which is set out in Note 14. Amounts due from joint
ventures of £33.9m (2014: £nil) is funding provided on 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 £6.2m (2014: £4.2m) 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 period, 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 (2014: 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 2015:
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
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.
2014 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 135.0 136.5 1.5 - - 135.0
Get Britain Building loans 19.3 19.9 14.8 5.1 - -
LIFF loans 9.4 10.4 0.3 2.1 2.1 5.9
Other financial liabilities carrying interest 55.7 57.3 28.9 28.4 - -
Financial liabilities carrying no interest * 301.2 314.2 249.4 26.7 5.4 32.7
At 31st October 2014 520.6 538.3 294.9 62.3 7.5 173.6
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 Get Britain Building
and 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
2015 it is estimated that an increase of 1% in interest rates applying for the full year would decrease the Group's PBT by
£1.8m (2014: £1.2m).
At 31st October 2015, the interest rate profile of the financial liabilities of the Group was:
Sterling bank borrowings, loan notes and long-term creditors 2015 2014
£m £m
Floating rate financial liabilities 220.9 163.7
Financial liabilities carrying interest 73.6 55.7
Financial liabilities carrying no interest* 291.2 301.2
585.7 520.6
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 60 months (2014: 71 months).
The maturity of the financial liabilities is: 2015 2014
£m £m
Repayable within one year* 266.6 288.6
Repayable between one and two years 53.2 58.3
Repayable between two and five years 48.9 22.0
Repayable after five years 217.0 151.7
585.7 520.6
*During the year the Company clarified its description of land payables on contractual terms to only include direct land
vendor liabilities. Other indirect land-related liabilities (mainly s106 contributions) have been classified within
accruals. The 2014 comparatives have been reclassified resulting in a move of £27.7m from land payables on contractual
terms to accruals, and accruals have been added to the 2014 comparatives.
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 2015 cash equivalents consisted of
sterling cash deposits of £187.4m (2014: £142.0m), with solicitors and on current account, £24.2m (2014: £28.4m) of other
financial assets, £47.1m (2014: £45.2m) of trade, other receivables and amounts recoverable on contracts, and £33.9m (2014:
£nil) 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:
2015 Nominalinterest rate Facevalue Carrying value Fair value Maturity
£m £m £m
Revolving credit facility 3 mth LIBOR + 2.50% 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
2014 Nominalinterest rate Facevalue Carrying value Fair value Maturity
£m £m £m
Revolving credit facility 3 mth LIBOR + 3.75% 135.0 135.0 135.0 2019
Get Britain Building loans EU reference rate + 2.2% to 4.0% 4.7 4.7 4.7 2016
LIFF loans EU reference rate + 2.2% 9.4 9.4 9.4 2019
Total non-current interest bearing loans 149.1 149.1 149.1
Get Britain Building loans EU reference rate + 2.2% to 4.0% 14.6 14.6 14.6 2015
Total current interest bearing loans 14.6 14.6 14.6
Financial assets and liabilities by category
2015 2014
Financial assets £m £m
Sterling cash deposits 187.4 142.0
Trade receivables 25.6 24.0
Amounts due from joint ventures 33.9 -
Recoverable on contracts 13.6 12.5
Other receivables 7.9 8.7
Total loans and receivables 268.4 187.2
Other financial assets 24.2 28.4
Total available-for-sale financial assets 24.2 28.4
Total financial assets 292.6 215.6
2015 2014
Financial liabilities £m £m
Revolving credit facility 206.0 135.0
Other loans 14.9 28.7
Land payments on contractual terms 160.4 186.8
Amounts due to joint ventures - 3.8
Other trade payables 33.3 30.0
Other payables 19.1 20.7
Accruals 152.0 115.6
Financial labilities at amortised cost 585.7 520.6
There were no gains or losses recorded on financial assets or liabilities in the year; the amount of interest income and
expense on each of the above can be seen in Note 5.
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 £1.9m (2014:
£1.7m). At the statement of financial position date there were no outstanding or prepaid contributions (2014: £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 30 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 2015 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 2015, the allocation of the Scheme's invested assets was 76% in return seeking investments, 4%
in corporate bonds, 18% in index linked gilts and 2% 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.
The amounts recognised in the statement of financial position are as follows: 2015£m 2014£m 2013£m
Present value of scheme liabilities (165.3) (173.4) (160.0)
Fair value of scheme assets 157.8 149.7 138.5
Net amount recognised at year end (7.5) (23.7) (21.5)
A deferred tax asset of £1.4m (2014: £4.8m) 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.
2015£m 2014£m
Administration expenses 0.5 0.3
Net interest expense 0.8 0.8
Charge recognised in the income statement 1.3 1.1
Remeasurements of the net liability:
Return on scheme assets 1.6 (1.1)
Loss arising from changes in financial assumptions 1.2 10.8
Gain arising from changes in demographic assumptions (7.1) -
Experience (gain)/loss (4.2) 0.4
(Credit)/charge recorded in other comprehensive income (8.5) 10.1
Total defined benefit scheme (credit)/cost (7.2) 11.2
The principal actuarial assumptions used were: 2015% 2014%
Liability discount rate 3.9 3.9
Inflation assumption - RPI 3.2 3.2
Inflation assumption - CPI 2.4 2.4
Rate of increase in salaries 0.0 0.0
Revaluation of deferred pensions 2.4 2.4
Increases for pensions in payment:
benefits accrued in respect of GMP 3.0 3.0
benefits accrued in excess of GMP pre-97 3.0 3.0
benefits accrued post-97 3.1 3.1
Proportion of employees opting for early retirement 0.0 0.0
Proportion of employees commuting pension for cash 100.0 100.0
2015 2014
Mortality assumption - pre-retirement AC00 SAPS S1 PxA CMI_2011 ltr1.5%
Mortality assumption - male post-retirement SAPS S2 PMA SAPS S1 PMA
CMI_2014 CMI_2011
ltr 1.5% ltr 1.5%
Mortality assumption - female post retirement SAPS S2 PFA SAPS S1 PFA
CMI_2014 CMI_2011
ltr 1.5% ltr 1.5%
Future expected lifetime of current pensioner at age 65:
Male aged 65 at year end 22.6 23.2
Female age 65 at year end 24.7 25.7
Future expected lifetime of future pensioner at age 65:
Male aged 45 at year end 24.7 24.8
Female age 45 at year end 27.0 27.2
Changes in the present value of assets over the year: 2015£m 2014£m
Fair value of assets at beginning of the year 149.7 138.5
Interest income 6.0 6.1
Return on assets (excluding amount included in net interest expense) (1.6) 1.1
Contributions from the employer 9.0 9.0
Benefits paid (4.8) (4.7)
Administration expenses (0.5) (0.3)
Fair value of assets at end of the year 157.8 149.7
Changes in the present value of liabilities over the year:
2015£m 2014£m
Liabilities at beginning of the year 173.4 160.0
Interest cost 6.8 6.9
Remeasurement (gains)/losses:
Actuarial losses arising from changes in financial assumptions 1.2 10.8
Actuarial gains arising from changes in demographic assumptions (7.1) -
Experience (gains)/losses (4.2) 0.4
Benefits paid (4.8) (4.7)
Liabilities at end of the year 165.3 173.4
The split of the scheme's liabilities by category of membership is as follows: 2015£m 2014£m
Deferred pensioners 94.1 109.6
Pensions in payment 71.2 63.8
165.3 173.4
2015Years 2014Years
Average duration of the scheme's liabilities at the end of the year 17.0 18.0
This can be subdivided as follows:
Deferred pensioners 21.0 21.0
Pensions in payment 12.0 12.0
The major categories of scheme assets are as follows:
2015£m 2014£m
Return seeking:
UK Equities 13.7 15.6
Overseas Equities 23.7 31.1
Other (hedge funds, multistrategy and absolute return funds) 76.2 24.5
Return seeking subtotal 113.6 71.2
Debt instruments:
Corporates 6.7 39.3
Index Linked 26.4 23.3
Debt instrument subtotal 33.1 62.6
Other:
Property - 0.7
Cash 2.6 6.3
Insured annuities 8.5 8.9
Other subtotal 11.1 15.9
Total market value of assets 157.8 149.7
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.
Sensitivity of the liability value to changes in the principal assumptions:
If the discount rate was 0.25 percent higher/(lower), the scheme's liabilities would decrease by £6.7m (increase by £7.1m)
if all the other assumptions remained unchanged.
If the inflation assumption was 0.25 percent higher/(lower), the scheme's liabilities would increase by £3.8m (decrease by
£3.7m) if all the other assumptions remained unchanged.
If life expectancies were to increase by 1 year, the scheme's liabilities would increase by £5.7m 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 (where applicable) is based on the historical share price movements of Crest
Nicholson Holdings plc since the company listed in February 2013 (2014: expected volatility (where applicable), based on
historic share price movements of comparable companies, given that Crest Nicholson Holdings plc was only 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.
2015 2015 2015 Total 2014 2014 Total
Date of grant 8th Mar 2013 14th Feb 2014 27th Feb 2015 8th Mar 2013 14th Feb 2014
Options granted 2,226,041 1,246,861 1,270,176 2,226,041 1,246,861
Fair value at measurement date £2.62 £3.49 £4.02 £2.62 £3.49
Share price on date of grant £2.80 £3.81 £4.45 £2.80 £3.81
Exercise price £0.00 £0.00 £0.00 £0.00 £0.00
Vesting period 3 years 3 years 3 years 3 years 3 years
Expected dividend yield 2.50% 2.50% 3.20% 2.50% 2.50%
Expected volatility 33.00% 28.90% 30.00% 33.00% 28.90%
Risk free interest rate 0.40% 0.40% 0.86% 0.40% 0.40%
Valuation model Binomial Binomial Binomial Binomial Binomial
Contractual life from 8th Mar 2013 14th Feb 2014 27th Feb 2015 8th Mar 2013 14th Feb 2014
Contractual life to 7th Mar 2023 13th Feb 2024 26th Feb 2025 7th Mar 2023 13th Feb 2024
Movements in the year
Options at beginning of the year 2,026,405 1,200,020 - 3,226,425 2,140,612 - 2,140,612
Granted during the year - - 1,270,176 1,270,176 - 1,246,861 1,246,861
Exercised during the year (47,360) (8,419) - (55,779) - - -
Lapsed during the year (50,334) (89,487) (49,341) (189,162) (114,207) (46,841) (161,048)
Options at end of the year 1,928,711 1,102,114 1,220,835 4,251,660 2,026,405 1,200,020 3,226,425
Exercisable at end of the year - - - - - - -
Charge to income £1.7m £1.2m £0.7m £3.6m £1.7m £0.9m £2.6m
The weighted average exercise price of LTIP options was £nil (2014: £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.
2015 2015 Total 2014 2014 2014 Total
Date of grant 6th Mar 2013 17th Aug 2015 11th Feb 2013 6th Mar 2013 6th Mar 2013
Options granted 615,000 1,500 1,070,131 92,500 615,000
Fair value at measurement date £0.00 £0.00 £0.00 £0.00 £0.00
Share price on date of grant £2.69 £5.68 £2.20 £2.69 £2.69
Exercise price £0.00 £0.00 £0.00 £0.00 £0.00
Vesting period 3 years 2 years 1 years 2 years 3 years
Expected dividend yield N/A N/A N/A N/A N/A
Expected volatility N/A N/A N/A N/A N/A
Risk free interest rate N/A N/A N/A N/A N/A
Valuation model N/A N/A N/A N/A N/A
Contractual life from 6th Mar 2013 17th Aug 2015 11th Feb 2013 6th Mar 2013 6th Mar 2013
Contractual life to 5th Mar 2023 16th Aug 2025 10th Feb 2023 5th Mar 2023 5th Mar 2023
Movements in the year
Options at beginning of the year 539,000 - 539,000 846,478 92,500 597,000 1,535,978
Granted during the year - 1,500 1,500 - - - -
Exercised during the year (539,000) - (539,000) (846,478) (92,500) - (938,978)
Lapsed during the year - - - - - (58,000) (58,000)
Options at end of the year - 1,500 1,500 - - 539,000 539,000
Exercisable at end of the year - - - - - - -
Charge to income £0.3m - £0.3m - £0.1m £0.6m £0.7m
The weighted average exercise price of employee share options was £nil (2014: £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.
2015 2015 2015 Total 2014 2014 Total
Date of grant 22nd May 2013 15th Jul 2014 16th Jul 2015 22nd May 2013 15th Jul 2014
Options granted 805,805 569,998 257,264 805,805 569,998
Fair value at measurement date £0.82 £0.70 £1.03 £0.82 £0.70
Share price on date of grant £3.09 £3.44 £5.63 £3.09 £3.44
Exercise price £2.47 £2.76 £4.51 £2.47 £2.76
Vesting period 3 years 3 years 3 years 3 years 3 years
Expected dividend yield 2.50% 2.50% 3.00% 2.50% 2.50%
Expected volatility 32.00% 28.90% 29.00% 32.00% 28.90%
Risk free interest rate 0.55% 1.61% 1.16% 0.55% 1.61%
Valuation model Binomial Binomial Binomial Binomial Binomial
Contractual life from 1st Aug 2013 1st Aug 2014 1st Aug 2015 1st Aug 2013 1st Aug 2014
Contractual life to 1st Feb 2017 1st Feb 2018 1st Feb 2019 1st Feb 2017 1st Feb 2018
Movements in the year
Options at beginning of the year 695,720 559,697 - 1,255,417 780,304 - 780,304
Granted during the year - - 257,264 257,264 - 569,998 569,998
Exercised during the year (6,373) (199) - (6,572) (4,026) - (4,026)
Lapsed during the year (72,233) (91,804) (9,974) (174,011) (80,558) (10,301) (90,859)
Options at end of the year 617,114 467,694 247,290 1,332,098 695,720 559,697 1,255,417
Exercisable at end of the year - - - - - - -
Charge to income £0.2m £0.1m - £0.3m £0.2m - £0.2m
Weighted average exercise Price Weighted average exercise Price
2015 2014
Options at beginning of the year £2.60 £2.47
Granted during the year £4.51 £2.76
Exercised during the year £2.48 £2.47
Lapsed during the year £2.74 £2.50
Options at end of the year £2.95 £2.60
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.
2015 2015 2015 Total 2014 Total
Date of grant 14th Feb 2014 27th Feb 2015 27th Feb 2015 14th Feb 2014
Options granted 155,752 138,112 119,107 155,752
Fair value at measurement date £3.81 £4.45 £4.45 £3.81
Share price on date of grant £3.81 £4.45 £4.45 £3.81
Exercise price £0.00 £0.00 £0.00 £0.00
Vesting period 3 years 3 years 1 years 3 years
Expected dividend yield N/A N/A N/A N/A
Expected 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 27th Feb 2015 14th Feb 2014
Contractual life to 13th Feb 2024 26th Feb 2025 26th Feb 2025 13th Feb 2024
Movements in the year
Options at beginning of the year 155,752 - - 155,752 - -
Granted during the year 4,872 138,112 119,107 262,091 155,752 155,752
Exercised during the year (160,624) - (6,912) (167,536) - -
Lapsed during the year - - (5,959) (5,959) - -
Options at end of the year - 138,112 106,236 244,348 155,752 155,752
Exercisable at end of the year - - - - - -
Charge to income £0.1m £0.4m £0.3m £0.8m £0.5m £0.5m
The weighted average exercise price of deferred bonus plan share options was £nil (2014: £nil).
Total Share Incentive Schemes
Movements in the year 2015 2014
Options at beginning of the year 5,176,594 4,456,894
Granted during the year 1,791,031 1,972,611
Exercised during the year (768,887) (943,004)
Lapsed during the year (369,132) (309,907)
Options at end of the year 5,829,606 5,176,594
Exercisable at end of the year - -
Charge to income £5.0m £4.0m
The weighted average share price at the date of exercise of share options exercised during the year was £4.08 (2014:
£3.78).
22 CONTINGENT LIABILITIES
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.
23 OPERATING LEASES
At 31st October 2015, total outstanding commitments for future minimum lease payments under non-cancellable operating leases were:
2015 2014
£m £m
Land and buildings
Within one year 2.5 3.0
Less: minimum sub-lease income (0.7) (1.0)
Between two and five years 8.1 8.7
Less: minimum sub-lease income (1.1) (0.9)
After five years 2.8 2.4
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