NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 31 MARCH 2026
27. Financial assets and liabilities continued
28. Trade and other payables continued Non-current
Contingent consideration is included in Level 3 of the fair value hierarchy. The fair value is determined considering the expected payment, discounted to present value using a risk-adjusted discount rate. The expected payment is determined separately in respect of each individual earn-out agreement, taking into consideration the expected level of profitability of each acquisition. The unobservable inputs are the projected forecast measures that are assessed on an annual basis. Changes in the fair value of contingent consideration relating to updated projected forecast performance measures are recognised in the consolidated Statement of Profit or Loss in the period that the change occurs. Reconciliation of Level 3 fair value of contingent consideration payable on acquisitions:
2026 £m
2025 £m
0.5
Other payables
6.2
Included in non-current trade and other payables is contingent consideration of £0.4m relating to acquisitions in the current and prior years (2025: £6.2m). 29. Share capital and Share Premium
2026 £m
2025 £m
9.3
2026 Number 97,356,109
2026 £m
2025 Number 96,356,109
2025 £m
At 1 April
6.7
Allotted, called-up and fully paid
Contingent consideration arising from current year acquisitions payable in future years Contingent consideration paid in the current year relating to previous years’ acquisitions Costs (credited)/charged to the consolidated Statement of Profit or Loss: Subsequent adjustments on acquisitions
2.2
6.7
4.9
Ordinary shares of 5p each
4.8
(2.8)
(2.3)
During the year to 31 March 2026, 1,000,000 shares of 5p each were issued to the Group’s Employee Benefit Trust (2025: nil). At 31 March 2026 the Trust held 1,229,297 shares (2025: 299,219). During the year to 31 March 2026, employees exercised 69,922 share options under the terms of the various share option schemes (2025: 115,381). During the year to 31 March 2026, a number of share options were exercised by employees under the CSOP scheme (note 30). £0.1m related to the exercise price paid by the employees to the Company was posted to the Share Premium account. 30. Share-based payment plans The Group operates various share-based payment plans. The various schemes are explained below and have been separated into two separate disclosures. The charge to the consolidated Statement of Profit or Loss in respect of each of these schemes is:
(5.8)
(1.7) (0.1)
0.1 3.0
Exchange difference
At 31 March
9.3
Subsequent adjustments on acquisitions of £5.8m credit (2025: £1.7m credit) and exchange differences of £0.1m loss (2025: £0.1m credit) are included within operating costs. For the year ended 31 March 2026, contingent consideration is not materially sensitive to forecast operating profits of the relevant acquired businesses. At 31 March 2026, the estimated fair value of contingent consideration payable on acquisitions would increase by £nil (2025: £5.0m) if projected forecast profits were higher by c.20% and decrease by £nil (2025: £5.7m) if projected forecast profits were lower by c.20%. 28. Trade and other payables Current
2026 £m
2025 £m
1.4
a) discoverIE Group plc long-term incentive plan (“the LTIP”)
2.0
– –
b) Deferred Share Bonus Plan (“DSBP”)
– –
c) Approved and unapproved executive share option schemes (“CSOP”)
2026 £m 49.4 29.0
2025 £m
1.4
2.0
Trade payables Other payables
42.3 26.7
a) The LTIP The LTIP involves a conditional award of shares on a grant of a nil-cost option. The award of shares to Executive Directors and senior management is recommended by the Remuneration Committee on the basis of various factors such as their contribution to the Group’s success. The LTIPs are equity-settled and there are no cash-settled alternatives. The vesting of an award is dependent on the individual’s continued employment for a three-year period from the date of grant and the satisfaction by the Company of certain performance conditions. For Executive Directors and certain senior management, the exercise of the awards is also subject to a two-year holding period from the date of vesting. For awards made in the year ended 31 March 2026, the performance conditions are as follows: LTIPs for Executive Directors and certain senior management: ■ 50% of the award is based on the Company’s comparative total shareholder return (“TSR”) against a comparator group made up of the constituents of the FTSE250 Index; and ■ 50% of the award is based on the Company’s absolute earnings per share (“EPS”) performance. LTIPs for certain operational management: ■ 75% of the award is based on local earnings targets; and ■ 25% of the award is based on the Company’s EPS performance. LTIPs for certain other employees: ■ 100% of the award has no performance conditions.
13.5 91.9
Accrued expenses and contract liabilities
12.1 81.1
Trade payables are non-interest-bearing and are settled in accordance with credit terms. Other payables and accrued expenses are non-interest-bearing and are settled throughout the year. Included in current year other payables is contingent consideration of £2.6m relating to acquisitions in the current and prior years (2025: £3.1m), employee-related payable of £15.3m (2025: £13.5m), VAT payable of £4.3m (2025: £4.2m), a total of £3.4m of customers’ deposits (2025: £3.5m) and £3.4m of other payables (2025: £2.4m). Contract liabilities relate to contracts with customers, recognised and measured in accordance with the requirements of IFRS 15, and relate to either advance payments received for goods to be delivered in the future or amounts invoiced in respect of performance obligations which are not yet satisfied in full and due to be satisfied within a period of 12 months from the reporting date. Contract liabilities as at 31 March 2026 amounted to £1.7m (2025: £1.7m). Revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period amounted to £1.3m (2025: £1.3m). Certain businesses in the Group participate in supply chain finance arrangements whereby suppliers may elect to receive early payment of their invoices from a bank by factoring their receivable from discoverIE entities. Under this arrangement, the payment term of invoices can be extended by 30–45 days from the original invoice due date, which impacts the timing of payment but does not alter the value of the recognised liability. Included within trade payables is £2.0m (2025: £2.1m) subject to such an arrangement.
192
193
discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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