TIDMJLH
RNS Number : 7273R
John Lewis Of Hungerford PLC
09 November 2021
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310 ("MAR"). With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
9 November 2021
JOHN LEWIS OF HUNGERFORD PLC
FINAL RESULTS
John Lewis of Hungerford plc ("John Lewis of Hungerford" or the
"Company"), the specialist kitchen manufacturer and retailer,
announces its final results for the year ended 30 June 2021.
Chief Executive's Business Review
We are pleased to provide a review of our FY21 financial year to
30 June 2021. As the prior year was significantly impacted by the
Covid-19 pandemic, we have also provided data from FY19 in order to
provide our shareholders with a more meaningful comparative.
Overview
As reported within our trading update released on 12 August
2021, we are pleased to report that the second half trading
recovered our first half losses in full, resulting in a full year
profit before tax of GBP80k (2020: Loss GBP885k; 2019: Loss
GBP220k). After an immensely disruptive year, with showroom
closures for 18 weeks, we are particularly pleased with the efforts
of the teams within the Company which resulted in us delivering a
profitable year.
The year finished with a positive gross cash position of
GBP1,302k. The Company has total loans of GBP1,137k, of which
GBP1,079k is secured on its freehold properties. Net cash,
excluding IFRS 16 lease liabilities, was therefore GBP165k (2020:
net debt GBP708k; 2019: net debt GBP314k). The Company was grateful
for the UK Government support received during the year, including
the deferral and re-phasing of payments for VAT and PAYE. The
re-phased payments were all met within the timescales agreed with
HM Revenue and Customs, and by year end GBP78k remained
outstanding, which is scheduled for full repayment by February 2022
The Company is pleased to have improved from a net debt of GBP708k
to a positive net cash position after loans of GBP165k in the
financial year, a positive improvement of GBP872k, with EBITDA (pre
IFRS 16) of GBP424k (2020: -GBP388k). Customer deposits at the
year-end were GBP363k higher than last year, reflecting the
strength of the order book at the year-end.
In February 2021, all the Directors and a PDMR (Person
Discharging Managerial Responsibilities) all wished to acquire
shares in the Company, and this was effected by a subscription for
new shares, which increased cash in the Company by GBP49k.
The table below illustrates the performance against the Covid-19
impacted FY20 year and also the non-Covid-19 disrupted FY19 year.
It is pleasing to note that with revenue 5% down on FY19, the gross
margin is broadly in line, demonstrating the management's focus on
cost control to ensure resilience in our operating model, during a
period of supplier price increases, throughout this challenging
period.
Financial Summary
FY21 FY20 Change FY19 Change
Revenue (GBP'000) 7,877 5,553 41.9% 8,306 -5.2%
Gross Profit (GBP'000) 3,712 2,549 45.6% 3,933 -5.6%
Gross Margin 47.1% 45.9% 1.2% 47.4% -0.3%
Profit before tax (GBP'000) 81 (885) 966 (220) 301
Tax (GBP'000) 124 94 30 (69) 193
Net Profit / (loss)
for year (GBP'000) 205 (791) 996 (289) 494
Net Cash / (debt) (GBP'000) 165 (708) 873 (314) 479
Earnings per share
(p) 0.11 (0.42) 0.53 (0.15) 0.26
------ ------- ------- ------- -------
Marketing
Core to the performance in the year under review has been our
ability to adapt to changing consumer behaviours, instigated by the
closure of our showrooms for 18 weeks of the year and by moving our
business operations back online, as required. The excellent work to
produce virtual showrooms very promptly after the initial lockdown
in March 2020 and ensure consistency in our marketing throughout
the pandemic, has ensured that the brand has remained strong and
visible throughout. The Company has seen a discernible shift in its
following across social media platforms, through the Company's
digital development strategy. With a new SEO partner from the start
of FY21, several high-profile collaborations and a data driven
approach to our digital campaigns, we continue to generate record
levels of interest, driven in part by gains in market share and
also from the 'pent up' demand arising from the first, long
lockdown, when focus on improving the home became a customer
priority. Our online activity has demonstrated the strength in our
marketing and allowed us to attract customers through our digital
channels and drive footfall to our showrooms when they re-opened.
This has ensured the showroom estate is consistently busy in all
locations, with high levels of quoted design activity, which will
continue to be recognised in FY22.
We have mentioned previously the increase in demand within the
home improvements sector, with many home related companies
experiencing an uplift in enquiries; the demand has been
significantly higher than in recent years. Shortages of skilled
labour within the industry and the trades people required to
install new kitchen and bedroom units, together with the more
general shortage of skilled labour within the construction sector,
has impacted lead times for many companies. We have been fortunate
to retain a highly skilled team in all areas of our business and
our lead times remain competitive, and therefore attractive, for
customers looking at luxury, painted kitchens and bedrooms. The
ongoing recruitment of key personnel in all areas of the business
remains a priority for the Company.
Kitchens sold in the year exceeded our recent performance, with
a reduction in our bedrooms activity in the year, primarily due to
a shift in consumer priorities for their living spaces. We have
seen the bedrooms area of the business returning to levels achieved
previously, in the current financial year.
Operations
The integrated retail model developed throughout FY20 has proven
effective over FY21. Promoting an 'appointment only' approach to
our design consultations has improved the effectiveness of our
design team, together with enhancing the customer experience
in-store. Virtual consultations are still offered to customers
unable to visit a showroom and these continue to be popular,
supported by our advances in the use of our virtual showrooms and
screen sharing technology.
We took the decision to close our central Oxford Showroom during
the year, on expiry of the lease. This has given us the opportunity
to utilise the space within our head office showroom in South
Oxfordshire, to showcase both our kitchens and our bedrooms
offering. Customers will benefit from a visit to our production
facility, once restrictions ease, which we anticipate being a
popular and important element of our customer experience.
The use of our new finance offering for customers, provided by
Hitachi Capital UK, has been very well received, with almost
GBP900k of sales secured in FY21, using the facility. This exceeded
our ambitions and has become a significant component in our
customer journey. We look forward to a continued partnership with
Hitachi Capital UK, who have been impressed with our exceptional
customer satisfaction scores.
Our systems improvements continue to take priority to ensure we
are able to support our teams to operate as efficiently as
possible. The implementation of the CRM system was the first step
in our programme of improvements and we look forward to building
our IT framework to manage our growth over the coming years.
Our development team also worked effectively to ensure the
timely launch of our new Beaded Shaker range of door style, which
has been well received by customers.
There have been widely reported disruption to supply chains
nationally over the last 18 months. The industry has experienced
significant delays across all bought-in items, together with raw
materials. Price increases have been seen in all areas, at an
unprecedented level. The operational team have had a challenging
year, requiring close management of the supply chain to ensure
continuity of supply and the successful fulfilment of customer
orders.
In view of these many challenges, we are pleased to report a
gross margin broadly in line with the non-Covid-19 disrupted FY19
year, with a 5% reduction of revenue.
12 months 12 months 12 months
to June to June to June
2021 2020 2019
---------------- ---------- ---------- ----------
GBP000 GBP000 GBP000
Total Sales 7,877 5,553 8,306
Cost of sales 4,165 3,004 4,373
-------------------
Gross margin 3,712 2,549 3,933
=================== ========== ========== ==========
Gross Margin % 47.1% 45.9% 47.4%
Investments in key supporting roles within the Company have been
made as we progress throughout the current financial year, given
the increased levels of consumer demand.
We continue to work closely with all of our partners to ensure
the continued safety of our employees, our customers and our
suppliers. We have ensured an ongoing focus on the health, safety
and wellbeing of our people.
Trading Outlook
As stated in our trading update released on 12 August 2021, the
Company entered the new financial year with an order book
substantially larger than in recent years. The level of orders
secured in the first 18 weeks of the year has remained high.
Despatched sales, forward committed orders and future orders
against which a first stage deposit has been taken, stood at
GBP7.4m (2020: GBP4.9m; 2019: GBP4.4m), which is significantly
ahead of the previous two year comparatives.
The unprecedented business climate throughout the reported
period has been challenging and the response of all of our
stakeholders has been instrumental in the results we report today.
The efforts of all those within the Company together with our
relationships with our partners and suppliers, all of whom have
been exceptionally supportive, give the Board confidence in the
Company's future performance.
Our employees have been outstanding in their commitment to
provide a high quality service to our customers and driving value
for our shareholders, and thereby ensuring the resilience of the
Company, throughout this turbulent period.
On behalf of the Board, I thank them all for their dedication
throughout the year as we look forward to a period of growth and a
return to sustained profitability, as we enter 2022, during which
the Company will celebrate its 50th Birthday.
Kiran Noonan
Chief Executive Officer
8 November 2021
Enquiries:
John Lewis of Hungerford plc 01235 774300
Kiran Noonan - Chief Executive Officer / Acting Chairman
Allenby Capital Limited (Nominated Adviser and Broker) 020 3328
5656
David Worlidge / Nick Naylor / George Payne (Corporate
Finance)
Matt Butlin (Sales and Corporate Broking)
Income Statement for the year ended 30 June
2021
2021 2020
Notes GBP GBP
1, 2,
Revenue 3 7,877,130 5,552,564
Cost of sales (4,165,462) (3,003,810)
------------ ------------
Gross profit 3,711,668 2,548,754
Selling and distribution
costs (408,863) (413,375)
Administrative expenses 4 (3,160,325) (3,080,877)
Other operating
income 4 165,012 210,000
------------ ------------
Total (2,995,313) (2,870,877)
Profit/(loss) from operations 4 307,492 (735,498)
Finance income 7 297 336
Finance expenses 8 (227,255) (150,654)
------------ ------------
Profit/(loss) before tax 80,534 (885,816)
Tax Credit 9 124,549 94,592
------------ ------------
Profit/(loss) for the year 205,083 (791,224)
============ ============
Earnings / (Loss) per share 10
Basic 0.11p (0.42)p
Fully diluted 0.10p (0.42)p
Statement of Financial Position as at 30 June
2021
30 June 30 June
2021 2020
Notes GBP GBP
Non-current assets
Intangible assets 11 140,470 157,190
Property, plant and
equipment 12 2,629,053 2,790,875
Right of use assets 13 1,372,434 1,444,476
Trade and other receivables 16 31,500 42,750
---------------- -------------
4,173,457 4,435,291
Current assets
Inventories 15 193,133 152,530
Trade and other receivables 16 868,878 542,526
Deferred tax asset 19 82,000 -
Cash and cash equivalents 1,301,612 558,765
---------------- -------------
2,445,623 1,253,821
Total assets 6,619,080 5,689,112
---------------- -------------
Current liabilities
Trade and other payables 17 (2,052,345) (1,454,231)
Customer deposits (944,000) (581,058)
Lease liabilities 14 (264,168) (242,253)
Provisions 20 (29,998) (60,998)
Borrowings 18 - (111,701)
---------------- -------------
(3,290,511) (2,450,241)
Non-current liabilities
Borrowings 18 (1,137,146) (1,156,033)
Lease liabilities 14 (1,335,874) (1,432,063)
Provisions 20 (52,632) (56,055)
---------------- -------------
(2,525,652) (2,644,151)
Total liabilities (5,816,163) (5,094,392)
---------------- -------------
Net assets 802,917 594,720
================ =============
Equity
Share Capital 23 193,945 186,745
Share Premium 1,222,433 1,188,021
Other Reserves 1,421 1,421
Revaluation reserve 518,357 560,906
Retained Earnings (1,133,239) (1,342,373)
---------------- -------------
Total equity 802,917 594,720
================ =============
The financial statements were approved by the Board of Directors
and authorised for issue on 8 November 2021 and were signed on
its behalf by:
Kiran Noonan Stephen Huggett
Director Director
Statement of Cash Flows for the year ended 30 June 2021
2021 2020
GBP GBP
Cash flows from operating activities
Profit/(loss) from
operations after tax 432,041 (640,906)
Amortisation of intangible
assets 32,970 32,839
Depreciation and impairment
of property, plant
and equipment 188,403 219,769
Depreciation of right
of use assets 256,990 313,625
Share based payments 4,051 4,965
Loss/(profit) on disposal
of property, plant
and equipment 3,237 (1,237)
(Increase) in inventories (40,603) (8,508)
(Increase)/decrease
in receivables (315,102) 157,088
Increase/(decrease)
in payables 598,114 (96,114)
Increase in Customer
Deposits 362,942 211,806
(Decrease)/increase
in provisions (34,423) 12,000
---------- ----------
Cash generated from operations 1,488,620 205,327
Tax (Credit) on Operations (124,549) (94,592)
Net cash from operating activities 1,364,071 110,735
---------- ----------
Cash flows from investing activities
Purchase of intangible
assets (16,250) (10,737)
Purchase of property,
plant and equipment (27,317) (27,538)
Net proceeds from
sale of property,
plant and equipment (2,487) 10,480
Interest received 297 336
Net cash used in investing
activities (45,757) (27,459)
---------- ----------
Cash flows from financing activities
Interest
paid (125,970) (150,654)
Increase in borrowings - 1,079,000
Allotment
of shares 41,608 -
Repayment of borrowings - finance leases (18,887) (32,483)
Repayment of borrowings - bank loans (111,701) (380,106)
Repayment of IFRS 16 lease liabilities (360,517) (327,455)
Net cash used in financing activities (575,467) 188,302
---------- ----------
Net increase in cash
and cash equivalents 742,847 271,578
---------- ----------
Net cash and cash
equivalents at the
start of the period 558,765 287,187
Net cash and cash
equivalents at the
end of the year 1,301,612 558,765
========== ==========
Net cash and cash
equivalents comprise:
Cash at bank and in
hand 1,301,612 558,765
Bank overdrafts - -
1,301,612 558,765
========== ==========
Notes:
1. GOING CONCERN
The financial statements are prepared on a going concern basis,
which the directors believe to be appropriate for the following
reasons:
The results show that the Company made a profit after tax during
the year of GBP204k (2020: loss after tax of
GBP791k) and had net current liabilities of GBP844k (2020:
GBP1,196k) as at 30 June 2021.
The year finished with a positive gross cash position of
GBP1,302k (2020: GBP559k). The Company has total loans of GBP1,137k
(2020: GBP1,268k) of which GBP1,079k (2020: GBP1,192k) is secured
on its freehold properties, and net cash excluding IFRS 16 lease
liabilities was therefore GBP165k (2020: net debt GBP708k; 2019:
net debt
GBP314k). The Company is pleased to have improved from a net
debt of GBP708k to a positive net cash position after loans of
GBP165k in the financial year, an improvement of +GBP872k, with
EBITDA (pre IFRS 16) of GBP424k (2020: -GBP388k). Customer deposits
of GBP944k (2020: GBP581k) are GBP363k higher than last year,
reflecting the strength of the order book at year end.
The Company owns the Freehold of its Head Office and Factory in
Wantage and its Showroom in Hungerford, which were revalued in
February 2020 and have a Net Book Value of GBP1,872k (2020:
GBP1,896k) as at 30 June 2021. The total Net Assets at 30 June
2021 were GBP803k (2020: GBP595k). The Directors have had
preliminary contact with lenders to re-finance the loan, based on
our return to profitability, asset backing and stronger cash
generation. It is the intention of the Directors to refinance the
loan at the earliest opportunity.
The Trading Outlook within the Chief Executive's Business Review
shows that the level of orders secured in the first 18 weeks of the
year has remained high. Despatched sales, forward committed orders
and future orders against which a first stage deposit has been
taken, stood at GBP7.4m (2020: GBP4.9m; 2019: GBP4.4m), which is
significantly ahead of the corresponding periods in both prior
years FY20 and the non-disrupted FY19, which leads the Directors to
believe that there is now sustained levels of consumer interest in
home improvements.
The Company has successfully developed a hybrid working model
allowing the business to work effectively during normal trading
conditions and during lockdowns, when the showrooms have been
closed. This transition to digital working practices, further gives
the Directors the confidence that the Company can now withstand any
disruption that may arise from the ongoing pandemic.
The Directors have developed a carefully considered Plan for
FY22, structured through the use of individual building blocks,
supported by substantive rationale. Cash flows have been prepared
for a reasonably foreseeable period of at least twelve months from
the date of signing of these financial statements.
For additional prudence, the Directors have modelled a
sensitivity analysis up to a 15% reduction in sales against this
Plan and for a period of twelve months from the date of signing, to
be assured that the Company can withstand any potential periods of
lockdown or other business impacts related to the ongoing
pandemic.
As the Company operates a made-to-order, negative working
capital model, it is reliant on the cash flows from customer
deposits and completion of sales to be able to meet its liabilities
as they fall due. The Directors have considered all of the factors
noted above, including the strength in the Company's current
trading and forward order book, together with the high levels of
quoted business, the support of its landlords and suppliers, plus,
the government support available. Taking these factors into
account, balanced with the inherent uncertainty associated with
forecasting the impact of the Covid-19 pandemic, the Directors are
confident that the Company has adequate resources to continue to
meet all liabilities, as and when they fall due, for the reasonably
foreseeable future and, at least for the period of twelve months
from the date of approval of these financial statements.
2. PROFIT/(LOSS) FROM OPERATIONS
2021 2020
GBP GBP
Profit/(loss) from operations is stated after
charging:
Auditors remuneration - Company
audit 26,900 18,500
Auditors remuneration - taxation
services 3,600 3,500
Amortisation of intangible fixed
assets 32,970 32,839
Depreciation of owned property
plant and equipment 175,959 196,259
Depreciation of plant and equipment
held
on finance leases 12,444 18,043
Depreciation of Right of Use Assets 256,990 313,625
Government Grant - CJRS
- Direct Factory Labour (20,571) (26,373)
- Other
Salaries (62,564) (56,819)
Other Operating Income - 'Government
Grant for Retail Businesses' (165,012) (210,000)
Profit / (Loss) on disposal of
property, plant and equipment 3,237 (1,237)
Operating lease rentals
- Plant and
machinery 11,610 11,610
Cost of inventories recognised
as an expense 2,806,385 1,976,981
3. TAX ON PROFIT / (LOSS) FROM OPERATIONS
2021 2020
GBP GBP
Current period taxation
UK Corporation tax charge for the period - -
Research and development tax credit - -
---------- ----------
Total current
tax - -
Origination and reversal of temporary timing
differences - 229,886
Current year deferred tax asset recognised
/ (not recognised) - (229,886)
Reversal of previously recognised Deferred
Tax asset 82,000 -
Deferred tax credit on losses - 131,571
Adjustment in respect of previous years
Research and Development tax credit - (36,979)
Changes in tax rates being 6% impact on 42,549 -
the deferred tax asset/liabilities recognised
on losses/revaluations in prior year
124,549 94,592
========== ==========
The tax assessed for the period differs from the standard rate
of corporation tax in the UK. The differences are explained
below:
2021 2020
GBP GBP
Profit/(loss) on ordinary activities before
tax 80,534 (885,816)
---------- ----------
Profit/(loss) on ordinary activities multiplied
by standard rate of corporation tax in
the UK of
19% 15,301 (168,305)
Effect of:
Expenses not deductible for tax purposes - 1,425
Depreciation on assets not qualifying for
tax allowances 2,197 4,498
Other permanent differences 32,992 (7,547)
Adjustment in respect of previous years
Research and Development tax credit - (36,979)
Prior year adjustment on IFRS16 adoption - (47,934)
Effect of change in local corporation tax
rate (104,867) (12,023)
Deferred tax asset not recognised (27,623) 229,886
Deferred tax credit on losses - 131,571
Change of tax rate for DT Asset on Revaluation (42,549) -
reserve recognised in OCI
Total tax credit / (charge) in income statement 124,549 94,592
========== ==========
On 3rd March 2021, the Chancellor of the Exchequer announced
an increase in rate of Corporation tax to 25% to take effect
from 1st April 2023 for companies whose profits are greater
than GBP250,000 per annum.
4. EARNINGS PER SHARE
2021 2020
Earnings/(loss) per ordinary share is
calculated as
follows:
Basic
Profit/(loss) attributable to
ordinary shareholders (GBP) 205,083 (791,224)
Weighted average number of ordinary
shares in issue 189,388,807 186,745,519
Earnings/(loss) per ordinary
share 0.11 p (0.42)p
------------ ------------
Fully diluted
Profit/(loss) attributable to
ordinary shareholders (GBP) 205,083 (791,224)
Weighted average number of ordinary
shares in issue 189,388,807 186,745,519
Weighted average number of ordinary
shares under option 17,478,866 4,369,961
Earnings/(loss) per ordinary
share 0.10 p (0.42)p
============ ============
Basic earnings per share amounts are calculated by dividing
the profit / (loss) for the year attributable to ordinary
equity holders of the Company by the weighted average
number of Ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing
the profit / (loss) attributable to ordinary equity holders
of the Company by the weighted average number of Ordinary
shares outstanding during the year plus the weighted
average number of Ordinary shares that would have been
issued on the conversion of all dilutive potential Ordinary
shares into Ordinary shares.
5. BORROWINGS
2021 2020
GBP GBP
Loans 1,079,000 1,190,701
Finance lease liabilities 58,146 77,033
------------ --------------
1,137,146 1,267,734
============ ==============
Presented in the balance sheet as:
Lease liabilities - current 264,168 242,253
Borrowings - current - 111,701
Borrowings - non-current 1,137,146 1,156,033
------------ --------------
1,401,314 1,509,987
============ ==============
(a) Bank & other borrowings
Analysis of bank loan repayments:
In one year or less - 111,701
In more than one year but
not
more than two years - -
In more than two years but
not
more than five years - -
In more than five years 1,079,000 1,079,000
1,079,000 1,190,701
============ ==============
The loan is secured by a legal charge over the Company's
freehold properties at Park Street, Hungerford, Berkshire and Grove
Business Park, Downsview Road, Wantage, Oxfordshire. The interest
only loan facility has an interest rate of 10.55% above base rate
with a minimum rate of 10.8% per annum, payable monthly on drawn
down funds. In case of default, an additional 7.2% interest would
be payable under the loan.
In the previous year the company had one bank loan secured by a
legal charge over the Company's freehold properties at Park Street,
Hungerford, Berkshire and Grove Business Park, Downsview Road,
Wantage, Oxfordshire. One of these loans was still outstanding at
the previous year end and was repaid on 1st July 2020.
The loan was repayable over 15 years from 22 March 2010 and
carried interest at a fixed rate of 7.55% per annum for a period of
10 years and thereafter at a floating rate linked to the Bank of
England base rate. The second loan has a value of GBP0, (2020:
GBP111,701) denominated in Sterling.
2021 2020
GBP GBP
(b) Finance lease liabilities
Gross nance lease liabilities
-
minimum lease payments:
In one year or
less 21,385 26,484
Between one and five
years 36,761 66,212
More than five years - -
58,146 92,696
--------- ---------
Future finance charges on finance
lease liabilities (8,065) (15,663)
Present value of finance lease
liabilities 50,081 77,033
========= =========
Future finance charges on finance lease liabilities are
analysed as follows:
2021 2020
GBP GBP
In one year or less (5,099) (7,597)
Between one and five
years (2,966) (8,066)
(8,065) (15,663)
========= =========
Finance lease liabilities are effectively secured as the rights
to the leased asset revert to the lessor in the event of
default.
6. PROVISIONS
Warranty Dilapidations Total
provision provision
GBP GBP
At 1 July 2019 45,575 59,478 105,053
Arising during the year 48,782 - 48,782
Utilised during the year (36,782) - (36,782)
At 30 June 2020 57,575 59,478 117,053
----------- -------------- ---------
Arising during the period - - -
Utilised during the period (31,000) (3,423) (34,423)
At 30 June 2021 26,575 56,055 82,630
=========== ============== =========
2021 2020
GBP GBP
Current 29,998 60,998
Non-Current 52,632 56,055
82,630 117,053
============== =========
Warranty Provision
The Company makes provision for potential future warranty claims
on kitchens & bedrooms sold. This provision is reviewed and
adjusted annually based on the levels of turnover achieved and the
claims recorded in the same period.
Dilapidations Provision
The Company makes such provision for dilapidations relating to
its leasehold showroom estate as it considers necessary based on
the length of the remaining term for each showroom & the future
plans for each showroom. Based on this, experience of exiting
previous showrooms and industry averages, Management have estimated
that a provision of GBP5 per square foot will give a reasonable
estimate of any futures costs. On exit from a showroom, once the
costs have been finalised and the showroom exited, the provision
would be released.
7. SHARE BASED PAYMENTS
2021 2020
GBP GBP
Share based payments
expense 4,051 4,965
----------- ----------- ------------
The charge relates entirely to equity-settled share based
payment transactions.
On 25 March 2019 the Company granted options over 26,215,931
ordinary shares of 0.1 pence each in the Company ("Ordinary
Shares") at an exercise price of 1 pence per Ordinary
Share to all employees and Directors of the Company under
the Company's Unapproved and EMI Share Option Plan ("Option
Plan").
Performance conditions apply to the vesting of options
under the Option Plan that are linked to the Company's
future profit and share price performance. In addition,
the Option Plan includes a hurdle criteria which stipulates
that no Ordinary Shares under the share price performance
criteria will vest until the share price of an Ordinary
Share reaches 3 pence.
The Option Plan was approved by shareholders at the 2018
Annual General Meeting and the principal terms of the
Option Plan were summarised in Appendix 1 to the 2018
Notice of AGM available on the Company's website www.john-lewis.co.uk.
The Option Plan was approved by shareholders at the Company's
Annual General Meeting on 11 December 2018 . The Company
has calculated charges for the share option awards using
Monte Carlo and Binomial models. Volatility and risk free
rates have been calculated for each share option award
based on expected volatility over the vesting period and
current risk free rates at the time of each award. Volatility
assumptions are based on historic volatility for the Company's
share price over 4 years. Assumptions for future profitability
have been based on management estimates.
The performance conditions attached to the share options
are as follows:
AIM listed share price (per Percentage of the Award
Ordinary Share) which vests
--------------------------------------
> GBP0.03 9.375%
> GBP0.04 9.375%
> GBP0.05 9.375%
> GBP0.06 9.375%
> GBP0.07 9.375%
> GBP0.08 9.375%
> GBP0.09 9.375%
> GBP0.10 9.375%
--------------------------------------------------------- --------------------------------------
If the AIM listed share price has reached GBP0.03 or higher
-------------------------------------------------------------------------------------------------
Profit before Tax (in any 12-month Percentage of the Award
statutory accounting period) which vests
--------------------------------------------------------- --------------------------------------
> GBP200k 5.00%
> GBP400k 5.00%
> GBP500k 5.00%
> GBP600k 5.00%
> GBP700k 5.00%
--------------------------------------------------------- --------------------------------------
Assumptions used in the valuation of share option awards
during the year were as follows:
Share price IFRS2
at date fair value
of award Risk Option per share
Award / exercise Expected free Expected life in option
date price (pence) volatility rate dividends years (pence)
25 March 0.6 / 0.125
2019 1.0 50% 1.02% - 10 - 0.229
Share and share option awards outstanding
The share options awarded during the year under the Option
Plan were as follows:
Scheme Exercise B / Fwd Number Number Number C / Fwd
and date price 1 July granted forfeited exercised 30 June
of award 2020 2021
----------------- ------------- --------- ----------- -----------
Option
Plan
25 March
2019
Vesting
date is
variable
but no
less then 1
2 years pence 17,479,844 - 356,972 - 17,122,872
------------- ----------------- ------------ --------- ----------- ----------- ------------
The weighted average remaining contractual life of outstanding
share options is 7.5 years. The number of exercisable
share options at 30 June 2021 was Nil (2020: Nil).
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END
FR FSEEEAEFSEIF
(END) Dow Jones Newswires
November 09, 2021 02:00 ET (07:00 GMT)
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