Picton Property Income Limited Annual Report 2021

With the exception of Executive Directors, awards are cash settled and vest after two years. The final value of awards is determined by the movement in the Company’s share price and dividends paid over the vesting period. For Executive Directors, awards are equity settled and also vest after two years. On 29 June 2020 awards of 599,534 notional shares were made which vest in June 2022 (2020: 441,322 notional shares). The next awards are due to be made in June 2021 for vesting in June 2023. The table below summarises the awards made under the Deferred Bonus Plan. Employees have the option to defer the vesting date of their awards for a maximum of seven years.

Units at 31 March 2021

Units at 31 March 2019 564,604

Units granted in the year

Units cancelled in the year

Units redeemed in the year

Units at 31 March 2020

Units granted in the year

Units cancelled in the year

Units redeemed in the year

Vesting date

31 March 2020 19 June 2021 29 June 2022

(2,616) (319,479) 242,509

– –

– (242,509)

438,907 599,534

– 441,322 (2,415)

– 438,907

– –

– –

– 599,534

564,604 441,322 (5,031) (319,479) 681,416 599,534 – (242,509) 1,038,441 The Group also has a Long-term Incentive Plan for all employees which is equity settled. Awards are made annually and vest three years from the grant date. Vesting is conditional on three performance metrics measured over each three-year period. Awards to Executive Directors are also subject to a further two-year holding period. On 29 June 2020 awards for a maximum of 860,740 shares were granted to employees in respect of the three-year period ending on 31 March 2023. In the previous year, awards of 878,164 shares were made on 19 June 2019 for the period ending 31 March 2022. The three performance metrics are: ӱ Total shareholder return (TSR) of Picton Property Income Limited, compared to a comparator group of similar listed companies; ӱ Total property return (TPR) of the property assets held within the Group, compared to the MSCI UK Quarterly Property Index; and ӱ Growth in EPRA earnings per share (EPS) of the Group. The fair value of share grants is measured using a combination of a Monte Carlo model for the market conditions (TSR) and a Black-Scholes model for the non-market conditions (TPR and EPS). The fair value is recognised over the expected vesting period. For the awards made during this year and the previous year the main inputs and assumptions of the models, and the resulting fair values, are:

Assumptions Grant date

29 June 2020 19 June 2019

Share price at date of grant

68.4p

95.0p

Exercise price Expected term

Nil

Nil

3 years (0.05)% 24.2% 24.5% 37.8% (11.4)% (10.7)% 26.7p

3 years 0.84% 18.7% 18.1% 27.1% 7.5% 3.0% 51.5p 95.0p

Risk-free rate – TSR condition Share price volatility – TSR condition

Median volatility of comparator group – TSR condition

Correlation – TSR condition

TSR performance at grant date – TSR condition

Median TSR performance of comparator group at grant date – TSR condition

Fair value – TSR condition (Monte Carlo method) Fair value – TPR condition (Black-Scholes model) Fair value – EPS condition (Black-Scholes model)

68.4p 68.4p

95.0p The Trustee of the Company’s Employee Benefit Trust acquired 958,000 ordinary shares during the year for £643,000 (2020: 954,000 shares for £844,000). The Group employed ten members of staff at 31 March 2021 (2020: nine). The average number of people employed by the Group for the year ended 31 March 2021 was nine (2020: ten). 8. Interest paid 2021 £000 2020 £000

7,574 114 311

Interest payable on loans

7,933 114 248

Interest on obligations under finance leases

Non-utilisation fees

7,999 8,295 The loan arrangement costs incurred to 31 March 2021 are £4,590,000 (2020: £4,534,000). These are amortised over the duration of the loans with £531,000 amortised in the year ended 31 March 2021 and included in interest payable on loans (2020: £371,000).

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