The Group operates a share-based incentive scheme for the Company's executive directors (being both board directors and certain members of the executive committee) and selected senior management. These awards will, under normal circumstances, vest subject to continued service and the achievement of performance conditions over a three-year period. Further details are given in the Directors' Remuneration Report. The Group recognised a total charge of £3,420,000 (2022: £989,000) relating to its performance share plan and sharesave scheme.
Performance share plan
The vesting of awards is subject to performance conditions set by the remuneration committee. The Group recognised a total charge of £2,352,000 for the year (2022: £280,000) with a corresponding entry to reserves. The weighted average fair value of share options granted during the year was £0.51 per share. Three outstanding awards had been granted to 25 March 2023:
During the year ended 27 March 2021 the remuneration committee granted 2,983,529 ordinary shares of 2.5p each at £nil value. The vesting of these awards was dependent on the Group's underlying earnings per share performance over the three-year period from 29 March 2020 to 25 March 2023. The following vesting schedule applies:
| Underlying EPS performance for year ended 25 March 2023 | % of award vesting |
| Equal to less than 6.57p | 0% |
| Equal to 8.36p or better | 100% |
| Between 6.57p and 8.36p | between 25% and 100% |
The assumptions used to measure the fair value of the shares granted are as follows:
| Share price on date of grant | £0.69* |
| Exercise price | nil |
| Expected volatility (using historic performance) | 96% |
| Risk-free rate | 0.2% |
| Dividend | 3.0p |
| Actual life | three years |
* Granted on 17 December 2020.
The Black–Scholes pricing model produced, using the above assumptions, an annual charge of £986,000 (2022: £81,000).
During the period ended 26 March 2022 the remuneration committee granted 2,709,748 ordinary shares of 2.5p each at £nil value.
The vesting of these awards will be dependent on the Group's underlying earnings per share performance over the three-year period from 28 March 2021 to 30 March 2024. The following vesting schedule applies:
| Underlying EPS performance for year ended 30 March 2024 | % of award vesting |
| Equal to less than 7.61p | 0% |
| Equal to 9.92p or better | 100% |
| Between 7.61p and 9.92p | between 25% and 100% |
| The assumptions used to measure the fair value of the shares granted are as follows: | |
| Share price on date of grant | £0.81* |
| Exercise price | nil |
| Expected volatility (using historic performance) | 94% |
| Risk-free rate | 0.3% |
| Dividend | 3.1p |
| Actual life | three years |
* Granted on 17 June 2021.
The Black–Scholes pricing model produced, using the above assumptions, an annual charge of £839,000 (2022: £199,000).
During the year ended 25 March 2023 the remuneration committee granted 3,204,413 ordinary shares of 2.5p each at £nil value.
The vesting of these awards will be dependent on the Group's underlying earnings per share performance over the three-year period from 25 March 2023 to 29 March 2025. The following vesting schedule applies:
| Underlying EPS performance for year ended 29 March 2025 | % of award vesting |
| Equal to less than 7.50p | 0% |
| Equal to 8.80p or better | 100% |
| Between 7.50p and 8.80p | between 25% and 100% |
The assumptions used to measure the fair value of the shares granted are as follows:
| Share price on date of grant | £0.62* |
| Exercise price | nil |
| Expected volatility (using historic performance) | 108% |
| Risk-free rate | 4.3% |
| Dividend | 3.3p |
| Actual life | three years |
* Granted on 17 June 2022.
The Black–Scholes pricing model produced, using the above assumptions, an annual charge of £527,000 (2022: £nil).
Reconciliation of share awards outstanding under the performance share plan are as follows:
| 2023
Number | 2022
Number |
| Outstanding at the beginning of the year | 8,110,391 | 7,429,677 |
| Granted during the year | 3,204,413 | 2,709,748 |
| Lapsed during the year | (2,818,577) | (2,029,034) |
| Outstanding at the end of the year | 8,496,227 | 8,110,391 |
Save As You Earn share option plan ('Sharesave')
The plan, which was established in 2015 and expires in 2025, is open to all employees on the UK payroll. Participants may elect to save up to £500 per month over the life of the plan under three-yearly savings schemes, each with a separate savings contract.
Under the 2020 Sharesave scheme, options were granted by the Company to participating employees to buy shares at a discount of 10 per cent from the then market price. At the end of the 2020 Sharesave scheme in 2023, these options will become exercisable for a period of six months. A charge of £387,000 (2022: £387,000) was recognised in the current period in relation to the 2020 Sharesave scheme.
Under the 2021 Sharesave scheme, options were granted by the Company to participating employees to buy shares at a discount of 20 per cent from the then market price. At the end of the 2021 Sharesave scheme in 2024, these options will become exercisable for a period of six months. A charge of £322,000 (2022: £322,000) was recognised in the current period in relation to the 2021 Sharesave scheme.
Under the 2022 Sharesave scheme, options were granted by the Company to participating employees to buy shares at a discount of 20 per cent from the then market price. At the end of the 2022 Sharesave scheme in 2025, these options will become exercisable for a period of six months. A charge of £359,000 (2022: £322,000) was recognised in the current period in relation to the 2022 Sharesave scheme.
Reconciliation of share awards outstanding under the Sharesave plan are as follows:
Save As You Earn option plan ('Sharesave')
| 2023
Number | 2022
Number |
| Outstanding at the beginning of the year | 5,918,097 | 5,742,520 |
| Granted during the year | 3,023,688 | 2,300,899 |
| Lapsed during the year | (1,617,970) | (823,723) |
| Vested during the year | (15,260) | (1,301,599) |
| Outstanding at the end of the year | 7,308,555 | 5,918,097 |