SUPERDRY PLC No share options were exercised during the period. The options outstanding at 24 April 2021 had a weighted average remaining contractual life of 23 months (2020: 15 months); these shares have an exercise price of GBPnil (2020: GBPnil).
The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Cash Based Conditional Awards
Cash-settled share-based payments were granted in the year under the PSP. These are equivalent to the RSAs granted during the year, but are to be settled through cash, rather than shares.
These awards have no value to the participant at the grant date, but subject to the conditions of the specific scheme can convert and give participants the right to a cash settlement at the end of the performance period.
The vesting period of these schemes is two years. Cash-settled share awards will also expire if the employee leaves the Group prior to the exercise or vesting date subject to the discretionary powers of the Remuneration Committee.
The terms and conditions of the award of cash-settled shares granted under the PSP during the year are as follows:
Group and Company
Grant date Type of award Number of Vesting Fair value at grant Fair value at reporting
shares period date date
October 2020 Cash-settled restricted share 286,951 2 years 1.75 2.87
award The movement in the number of share awards outstanding is as follows:
Group and Company
2021 2020
Number of shares Number of shares
At start of the period - -
Granted 286,951 -
Forfeited (25,793) -
Total number of outstanding share awards at end of the period 261,158 - None of the share awards were exercisable at the period end date (2020: nil).
The shares granted during the year are restricted share based conditional awards. The terms and conditions of the award specify that the fair value at the end of the performance period will be the lower of fair value on that date or a cap of twice the grant price.
The fair value of the shares awarded at the grant date during the year was GBP0.5m (2020: GBP2.9m) and has been remeasured to GBP0.7m (2020: GBPnil) at the reporting date. The fair value of the award is determined at the modified grant date and is remeasured at each subsequent reporting period. The shares granted during the year did not contain any market-based vesting criteria.
A charge of GBP0.2m (2020: GBPnil) has been recorded in the Group statement of comprehensive income during the year for cash-settled schemes under the PSP.
Save As You Earn
A Save As You Earn scheme is operated by the Group. No charge (2020: no charge) has been recorded in the Group statement of comprehensive income during the year.
Buy As You Earn
A Buy As You Earn scheme is operated by the Group which commenced in August 2016. In the year 31,032 shares (2020: 15,540 shares) have been purchased under the scheme. The charge to the Group statement of comprehensive income is highly immaterial and therefore has not been accounted for.
Other schemes
Share options were issued in the current and prior years as part of recruitment packages for certain members of senior management. These options are subject to leavers' provisions and the exercise period is up to two years. The charge to the Group statement of comprehensive income in financial year 2021 for these awards is GBP0.1m (2020: GBP0.4m).
9. Founder Share Plan
On 12 September 2017, the Founders of Superdry ("the Founders"), Julian Dunkerton and James Holder, announced the launch of a long-term incentive scheme, the Founder Share Plan ("FSP") under which they agreed to share increases in their wealth with employees of the Group. The Founders had agreed to transfer into a fund 20% of their gain from any increase in the Group's share price over a threshold of GBP18.
The measurement period for the FSP ran from 1 October 2017 to 30 September 2020, and as such the measurement period for the market-based vesting criteria expired over the course of the current year.
The gain to be transferred into the fund was to be calculated using the market value of the shares, calculated as the average price of a Superdry Plc share over the 20 dealing days prior to the maturity date (30 September 2020). When calculated, the market value of the shares on maturity did not meet the minimum threshold of GBP18 and therefore FSP scheme did not meet the vesting criteria.
IFRS 2 stipulates that there is no adjustment to the Group's Statement of comprehensive income where the scheme does not vest due to a market-based condition, and so there is no adjustment required to recognise that the scheme will not vest.
The vesting period for the awards differed depending on the seniority of the colleagues in question. To be eligible for the award, employees needed to remain in employment on the vesting date, details of which are as follows:
Share settled element - Senior management
-- 50% - 31 January 2021
-- 50% - 31 January 2022
Cash and share settled elements - All other colleagues
-- 50% - 31 January 2021
-- 50% - 31 July 2021
In accordance with IFRS 2 the FSP scheme has been accounted for as an equity settled share-based payment scheme. The fair value of the award is determined using a Monte Carlo pricing model.
The share-based payment charge associated with the FSP will accrue over five financial periods in line with the original vesting period, up until financial year 2022.
A charge of GBP0.5m (2020: GBP0.3m) has been recorded in the Group statement of comprehensive income during the year.
The number of share awards granted in the period is nil. The number still in issue as at 24 April 2021 is 2,651,638, although none of these have met the vesting criteria. These options have a nil exercise price.
10. Tax
The tax expense comprises:
Group
2021 2020
GBPm GBPm
Current tax
-- UK corporation tax charge for the period - -
-- Adjustment in respect of prior periods (0.9) (6.1)
-- Overseas tax 0.8 1.8
Adjusting tax (credit)/expense - (0.1)
Total current tax (credit)/expense (0.1) (4.4)
Deferred tax
-- Origination and reversal of temporary differences 7.9 (1.0)
-- Deferred tax asset movements in respect of tax losses (7.7) (5.8)
-- Adjustment in respect of prior periods 3.2 5.0
Adjusting tax (credit)/expense (3.9) (17.3)
Total deferred tax (credit)/expense (0.5) (19.1)
Total tax (credit)/expense (0.6) (23.5) The tax credit on adjusted loss is GBP0.1m (2020: GBP4.4m credit). The net tax credit on adjusting items totals GBP3.9m (2020: GBP17.4m tax credit), which includes a prior period charge of GBP0.4m.
An adjusting tax credit of GBP1.4m arises as a result of impairments to the right of use asset values, a GBP0.3m adjusting tax credit as a result of impairments to property, plant and equipment, at the balance sheet date and an adjusting tax credit of GBP2.2m arises in connection with movements on the derivative contracts and an updated onerous lease review.
Factors affecting the tax expense for the period are as follows:
Group
2021 2020
GBPm GBPm
(Loss)/profit before tax (36.7) (166.9)
(Loss)/profit multiplied by the standard rate in the UK - 19.0% (2020: 19.0%) (7.0) (31.7)
Uncertain tax position 1.3 -
Permanent differences 0.8 1.2
Overseas tax differentials (1.0) (10.9)
Deferred tax not recognised 2.4 19.6
Change in overseas tax rates - -
Effect of tax rate changes 0.2 (0.6)
Adjustment in respect of prior periods 2.7 (1.1)
Total tax (credit)/expense excluding adjusting items (0.6) (23.5) The Group's tax credit on adjusted losses of GBP3.3m (2020: GBP6.1m loss) represents an effective tax rate of 26.2% (2020: 14.6%) and the Group's tax credit on adjusting losses of GBP3.9m (2020: GBP17.4m) loss represents an effective tax rate of 16.2% (2020: 13.9%). Taken together the Group's tax credit of GBP0.6m (2020: GBP23.5m credit) represents a total effective tax rate of 1.6% (2020: 14.1%) for the period ended 24 April 2021. The Group's total effective tax rate of 1.6% is lower than the statutory rate of tax of 19%.
(MORE TO FOLLOW) Dow Jones Newswires
September 16, 2021 02:00 ET (06:00 GMT)
