26 Share-based payments continued Measurement of fair values
The fair value of services received in return for share options is calculated with reference to the fair value of the award on the date of grant. The fair value is spread over the period during which the colleague becomes unconditionally entitled to the award, adjusted to reflect actual and expected levels of vesting. The assumptions used in the models are illustrated in the table below:
Fair value at measurement date
Expected volatility
Option expected term
Risk free interest rate
Grant date
Exercise price
CSOP scheme
September 2019
£0.55
£1.79
42.2% 7 years
0.35%
Sharesave scheme August 2018–May 2022
£0.70–£0.86 £0.99–£2.15 39.7–53.2% 3 years 0.50–2.20%
ESPP scheme ISO scheme LTIP scheme RSU scheme RSP scheme Deferred shares
February 2020–May 2022 August 2018–September 2019 August 2018–November 2021 August 2018–November 2021
£0.55–£0.68 £1.58–£2.30
37.60% 1 year
0.50%
£0.54–£0.65 £1.61–£2.87
£1.82 40.7–48.4% 7 years 0.38–1.50% £nil * 37.4–51.5% 3 years 0.21–2.00%
£1.60–£2.87 £nil *–£0.01 47.6–51.5% 3 years 0.32–2.00%
May–November 2021
£2.36–£2.85
£nil £nil
N/A 10 years
N/A
September 2019–October 2021 £1.84–£2.91
40.4–55.0% 2 years 0.35–1.50%
Phantom schemes October 2017–November 2021
£1.84–£2.75
£nil 31.0–47.6% 3 years 1.81–1.96%
* The option exercise price is £nil; however, £1 is payable on each occasion of exercise for the August 2018 scheme only. The expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour. For the options granted in the year ended 31 May 2022, dividend yield assumed at the time of option grant is 1.75% (2021: 2.5%). Reconciliation of outstanding share options The options outstanding at 31 May 2022 have an exercise price in the range of £nil to £2.15 (2021: £nil to £2.15) and a weighted average contractual life of three years (2021: three years). The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, outstanding share awards during the year:
2022 No (’000)
2022 WAEP
2021 No (’000)
2021 WAEP
9,494 5,605
£0.79 £0.75 £0.89 £1.39
Outstanding at 1 June Granted during the year Exercised during the year
8,995 £0.83 3,537 £0.91
(1,028) (2,640)
(1,821) (1,217)
£0.88 £0.59
Forfeited in the year
Outstanding at 31 May
11,431
£0.68
9,494 £0.79
Exercisable at end of year
119
£1.00
363 £1.13
Number of instruments as at 31 May 2022
Number of instruments as at 1 June 2021
Instruments granted during the year
Options exercised in the year
Forfeitures in the year
Scheme
324,001
CSOP schemes
490,093
– (58,812)
(107,280)
(928,069) 3,714,713
Sharesave/SAYE schemes
2,898,920 2,230,709 (486,847)
506,218 60,434
ESPP schemes ISO schemes LTIP schemes RSU schemes RSP scheme Deferred shares Phantom schemes
689,315 506,218
– (689,315) – (14,510)
74,944
–
(550,374) 3,203,721
2,866,326 1,225,045 (337,276)
748,711
1,005,520
– (83,188)
(173,621)
– (16,518) 2,734,411
1,200,000 1,550,929
110,553
80,631 91,616 (61,694)
–
188,345 27,931 9,494,094 5,604,517 (1,027,817) (2,640,101) 11,430,693 – – (160,414)
The liability for the cash settled share-based payments at 31 May 2022 was £0.1m (2021: £0.5m).
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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