FY26 was our first year under the UK Corporate Governance Code 2024, which asks boards to report what their governance achieved as well as how it works.

Decisions and what followed

In August we met at short notice to approve the surrender of the Poundbury warehouse lease, and we left the building in September once Huntworth was serving every store and online order. In December we approved the go-live plan for the merchandise planning system, having twice challenged management on its budget and phasing.

We also applied our test for returning surplus cash: net cash must stay above about £30m through the seasonal low point. It fell below that level in October, so we are not proposing a buyback this year. The board’s other decisions are listed on page 64.

Culture

Store visits tell the board most about culture. We were in Oban the week the store opened, and colleagues there raised lone working on winter evenings, as Colleague Voice also did. Management has since changed rotas at 31 of the 38 smaller stores and issued personal alarms at the other seven.

In Oban, colleagues told us they were proud of how the town had welcomed them and worried about closing up alone on winter evenings.

Helen Ashdown, Chair

The external review

Harbour Board Review, which has no other connection with the company, ran this year’s board review. It found that the board debates openly and works well with management. It also said our papers are too long, that we should spend more time on technology before the systems programme in FY27, and that we should get to know the people below the Executive Committee who could one day lead the business. The actions we agreed are on page 65.

Getting ready for Provision 29

From FY27 the board must declare whether the company’s material controls were effective at the year end. In December we approved 31 material controls. Internal audit has tested the design of all of them and how 24 work in practice. It will test the other seven, which depend on the new system, during FY27, and our first declaration will rest on a full year of evidence.

Board composition

The board did not change in the year. Half of the directors are women and half are from a minority ethnic background. Michael Adebayo reached six years on the board in March 2026, and after reviewing his independence we reappointed him as Senior Independent Director for a further three years. During FY27 we plan to add a non-executive director with experience of property and of running a large estate of sites, as we work towards 150 stores by FY30.

Compliance and the AGM

In FY26 the company applied the principles of the Code and complied with all of its provisions that applied in the year. The corporate governance report on page 62 explains how. Every director will stand for re-election at our AGM at Hale House, Dorchester, at 11am on Thursday 18 June 2026.

Each biography ends with the board’s view of why that director’s contribution matters to our long-term success.

The committee meets every two weeks, with a longer monthly session on strategy and performance.

Compliance with the Code

The UK Corporate Governance Code 2024 applied to Swift & Hale for the first time in FY26. For the 52 weeks to 31 January 2026 the company applied the Code’s principles and complied with all of its provisions that applied in the year.

Provision 29, the declaration on material internal controls, applies to periods starting on or after 1 January 2026, so our first declaration will be in the FY27 report. For FY26 the board reviewed risk management and internal control on the same basis as in previous years. The Code is published at frc.org.uk.

Leadership and purpose

Our purpose is to get people outside more often and bring them home well. The board agreed it in 2021 and tests its decisions against it. When it approved the six FY27 store openings, it weighed each town’s distance from a national park or national trail alongside the expected payback.

In June 2025 the board spent two days on strategy with the Executive Committee, covering growth to 150 stores by FY30, the economics of repair and resale, and how AI assistants are changing the way customers find kit. It reviewed progress on the four priorities at every scheduled meeting. The matters reserved for the board are published on our website with the committees’ terms of reference.

Culture

The board wants colleagues who know the kit and the outdoors, treat customers as they would a friend in the hills, and say so when something is wrong. It judges how close we are from the engagement survey, Speak Up reports, Colleague Voice and its own visits.

The board sees survey results by store, region and function. Pride in the company and confidence in store managers scored highest. Rotas and how far ahead colleagues know their hours scored lowest, which matched what Colleague Voice was telling us. Speak Up reports rose after a campaign in stores and at Huntworth, and the board takes that as a sign that more colleagues know the service. The Audit and Risk Committee reviews every case, and the board sees a summary twice a year.

Three board meetings took place away from Hale House: at Huntworth in May 2025, over two days at Fort William and the new Oban store in September, and in Galway in November. Directors spent time with colleagues without managers present, and the non-executive directors made 37 further store visits between them. They found a strong culture in stores, strained by rotas and by lone working in the smallest stores.

Division of responsibilities

The board has eight members: the Chair, two executive directors and five independent non-executive directors, so more than half the board, excluding the Chair, is independent. The roles of the Chair, Chief Executive and Senior Independent Director are set out in writing and published on our website.

Chair

Helen Ashdown leads the board and is responsible for its effectiveness. She sets agendas with the Chief Executive and Company Secretary, makes sure directors get accurate information in good time, and leads the board’s contact with shareholders. She was independent on appointment.

Chief Executive

Tom Penhallow runs the business, proposes the strategy and budget, and leads the Executive Committee in delivering them.

Senior Independent Director

Michael Adebayo is a sounding board for the Chair and an intermediary for the other directors. Shareholders can go to him if contact through the Chair or the executive directors has not resolved their concerns. He leads the appraisal of the Chair.

Non-executive directors

The non-executive directors challenge management, help shape strategy and scrutinise performance. They make up the committees and set executive pay through the Remuneration Committee.

Company Secretary

Claire Hollins advises the board on governance, makes sure its procedures are followed and organises induction and training. Directors may also take independent professional advice at the company’s expense.

Four committees (Audit and Risk, Nomination, Remuneration and Sustainability) carry out some of the board’s work, and each committee chair reports to the next board meeting. Their reports start on page 67.

Meetings and attendance

The board held seven scheduled meetings and two additional ones. The August 2025 meeting was called at short notice to approve the surrender of the Poundbury lease. Marcus Leng could not attend because of a prior overseas commitment and gave his comments to the Chair beforehand. The December meeting approved the go-live plan for the merchandise planning system and the 31 material controls. After each scheduled meeting the Chair met the non-executive directors without the executives.

Executive directors attend committee meetings by invitation and are not members. No director is present when their own pay or reappointment is discussed.

What the board did in FY26

Stakeholders and workforce voice

The section 172 statement on page 33 shows how stakeholder interests shaped decisions.

Colleagues

We use two of the Code’s methods together: a designated non-executive director, Ravi Dhanda, and a formal workforce panel, the Colleague Voice forum. Its 14 members are elected by colleagues in stores, at Huntworth and at head office, and serve two-year terms. The forum met four times with Ravi and twice with the full board. The board considers this effective for a workforce of 3,900 across 128 stores, Huntworth and head office, because members are elected and put their views to the whole board.

The forum raised rotas and Sunday working, uniform comfort, the colleague discount on Hale Again and safety when working alone. Management acted on lone working first. It reviewed the 38 smaller stores where a colleague could be alone at opening or closing, changed rotas at 31 of them so nobody opens or closes alone, and gave colleagues at the other seven personal alarms linked to a monitoring centre. Management will report back on the other subjects during FY27.

Shareholders

Tom Penhallow and Anjali Mercer met investors after the full-year and interim results. Helen Ashdown and Michael Adebayo met holders of about 40% of the shares, mainly about strategy, capital allocation and board succession. Sinead Fallon wrote to our largest shareholders about how the remuneration policy will apply in FY27, and our joint brokers gave the board investor feedback twice. No resolution at the 2025 AGM received 20% or more of votes against.

Customers, suppliers and communities

The board reviews customer research, including net promoter score (72 this year), at each scheduled meeting. Hannah Coutts reported on ethical trade and supplier audits, and the Sustainability Committee oversees the Path Fund.

Time commitments

Directors disclose their other significant commitments before appointment and must ask the board before taking on new ones. We expect the Chair to give about 80 days a year and each non-executive director at least 20, with more for committee chairs and the Senior Independent Director. In September 2025 the board approved Marcus Leng’s appointment as a non-executive director of a privately owned travel software company, having checked that it raises no conflict and leaves him enough time.

The board reviewed these commitments in January 2026 and is satisfied that every director has enough time for the role.

Independence and conflicts

Each year the board reviews the independence of the non-executive directors against Provision 10 of the Code and considers all five independent. None has a material business relationship with the company, receives pay other than fees or represents a major shareholder. The Nomination Committee looked closely at Michael Adebayo’s independence when he passed six years on the board in March 2026 (page 67).

Under the Companies Act 2006 and the articles, the board can authorise situations where a director’s interests conflict, or may conflict, with the company’s. Directors declare any change at each meeting, and the Company Secretary keeps a register that the board reviews every year. Anjali Mercer is a trustee of a youth outdoor education charity that may apply for Path Fund grants. The board has authorised this on condition that she takes no part in decisions on grants to that charity. No other conflicts were declared.

Board performance review

Our last external review was in FY23, and the Chair and Company Secretary ran the FY24 and FY25 reviews internally. For FY26 the Chair commissioned Harbour Board Review, which has no other connection with the company or any director. Between October 2025 and January 2026 it read a year of board and committee papers, observed the November board meeting in Galway and the December Audit and Risk Committee meeting, and interviewed every director, the Company Secretary, the Executive Committee and the audit partner.

It found that the board and its committees work well. Directors described open debate and a close relationship with management that does not stop them pushing back, and the reviewers saw the board’s knowledge of stores and customers as a strength. The board agreed these actions in January 2026.

The FY25 actions are complete: board papers now carry a stakeholder summary for every major decision, and the board gave more time to the Republic of Ireland, including the Galway meeting. The Chair reviewed each director’s performance one to one, and Michael Adebayo led the non-executive directors’ appraisal of the Chair. The board recommends every director for re-election at the 2026 AGM.

Induction and training

New directors get an induction covering strategy, finance, risk and governance, with time in stores, at Huntworth, at a repair bench and on a led walk. No directors joined in FY26. Training for the whole board covered:

• the 2024 Code and the controls declaration, from Fairley Grange LLP and Linden Assurance
• a ransomware exercise with the Executive Committee in October 2025, run by an external specialist
• preparing for UK Sustainability Reporting Standards
• PFAS rules and extended producer responsibility for textiles, from Hannah Coutts and the product team
• AI assistants and product search, from Leah Brennan and Sam Whitlock

Risk management and internal control

The board is responsible for the group’s risk management and internal control systems and for deciding the principal risks it is willing to take. The systems are designed to manage the risk of failing to meet business objectives and can give only reasonable assurance against material misstatement or loss.

The Executive Risk Committee, chaired by Anjali Mercer, reviews the group risk register every quarter. The board reviews the principal and emerging risks twice a year and sets risk appetite. Internal audit, led by the Head of Internal Audit and co-sourced with Linden Assurance, reports to the Audit and Risk Committee chair. Through that committee the board reviewed the effectiveness of the systems for FY26 and up to the date of this report, drawing on internal audit, management’s assurance, the external auditor’s findings and the Provision 29 work. It found no significant failings or weaknesses.

Provision 29 readiness

From FY27 the board must declare whether the material controls were effective at the year end. In December 2025 the board approved 31 material controls: 15 over financial reporting, ten over operations and technology, and six over compliance. Internal audit has tested the design of all 31 and the operation of 24. The other seven depend on the merchandise planning system and will be tested in FY27. Testing found gaps in five controls, none of which caused an error in the financial statements. Four are fixed and the fifth will be by the end of July 2026. The Audit and Risk Committee report on page 70 has more detail.

There were no board changes in FY26, so the committee spent the year on succession and on the skills the board will need as the company grows.

Members and meetings

I chair the committee. The other members are Michael Adebayo, Fiona Garside, Sinead Fallon and Ravi Dhanda, all independent non-executive directors. We met in March and September 2025 and January 2026, and every member attended each meeting. Tom Penhallow and Josie Kamara, the People Director, joined us for executive succession, and Claire Hollins is secretary. Michael chairs any discussion of succession to the Chair, and I take no part.

Succession for the executive directors

We want options ready well before either executive role changes. In an emergency, Anjali Mercer would act as interim Chief Executive and the Group Financial Controller as interim Chief Financial Officer.

Two senior leaders could be candidates for Chief Executive, and one for Chief Financial Officer, in three to five years. Each has a development plan agreed with Tom and Josie, and in FY26 an external search firm benchmarked them against the market. They will now present to the board at least twice a year and be mentored by a non-executive director. For the longer term we reviewed the 48 people in senior leadership, 42% of them women, and the roles we would need to fill from outside.

Non-executive tenure

Non-executive directors serve three-year terms, normally for up to two terms, and stand for re-election every year. Any term beyond six years gets a particularly careful review.

Michael Adebayo reached six years in March 2026. Without him present, the committee considered his independence, contribution and time commitment, and what the external review had found. Fellow directors described him as someone who asks the difficult question early, and we found nothing in his length of service that affects his independence. With the merchandise planning system going live in FY27 and the search for my successor ahead, the board reappointed him as Senior Independent Director for three years from March 2026. He will not serve beyond nine years.

I joined the board in September 2019 and reach the Code’s nine-year limit for a chair in September 2028. Michael will lead the search for my successor, and the committee will agree the timetable by January 2027.

Board skills and a new appointment

Each year we compare the board’s skills with what the strategy needs. The board has strong retail, finance, digital, people and sustainability experience, and less than we would like in property and in running a growing estate. With 41 lease events due in the next two years and a target of 150 stores by FY30, we will appoint one more independent non-executive director with that experience during FY27, taking the board to nine. We agreed the role specification in January 2026 and will use a search firm signed up to the Enhanced Code of Conduct for Executive Search Firms.

The committee recommended that every director stand for re-election at the 2026 AGM, and the biographies on page 58 explain why.

Board diversity policy

Our policy covers the board and its committees, and the People Director applies the same principles to the Executive Committee and senior leadership. We appoint on merit against objective criteria, and we want directors who differ in sex, ethnicity, social background, age, nationality and experience, including some who have worked in stores. The policy’s objectives match the targets in UKLR 6.6.6R(9):

• at least 40% of the board should be women
• at least one of the Chair, Chief Executive, Chief Financial Officer and Senior Independent Director should be a woman
• at least one director should be from a minority ethnic background

At 31 January 2026 we met all three. Four of the eight directors are women, including the Chair and the Chief Financial Officer, and four are from a minority ethnic background. Nothing has changed since the year end. Below board level, women make up 54% of colleagues and 45% of store managers, and 20 of the 36 colleagues on the FY26 Next Store Manager programme were women.

UK Listing Rules diversity data

These tables follow UKLR 6.6.6R(10) and show the position at 31 January 2026. Executive management means the Executive Committee, including the two executive directors and the Company Secretary. Directors and executive management each completed the same confidential questionnaire and chose their own category.

The committee’s performance

The external review found the committee well run and its executive succession work thorough. It recommended starting succession planning for the Chair and Senior Independent Director earlier, which we have accepted.

This is our report for FY26, the first year under the UK Corporate Governance Code 2024. The accounts held no surprises.

The largest judgement was store impairment. A few stores traded below plan, so we tested management’s forecasts and the discount rate behind the net charge of £1.5m. We also looked closely at stock, because the move to one stock pool at Huntworth and the wet August changed where stock sat and how quickly it sold.

Provision 29 took a large share of our agenda, and I expect us to be ready for the first declaration in next year’s report.

Cyber security took more of our time than before. After attacks on other UK retailers in 2025, we asked management to show us how quickly we could restore online trading, tills and the distribution centre. I will be at the AGM on 18 June 2026 to answer questions.

Members and attendance

The committee has three members, all independent non-executive directors. I am a chartered accountant and former audit partner, and the board considers that I have recent and relevant financial experience. Michael Adebayo brings risk and control experience from a building society, and Marcus Leng brings digital and technology experience from the travel industry. The board is satisfied that the committee as a whole has competence relevant to the group’s sector. Biographies are on page 58.

We met five times in FY26 and twice more after the year end, in March and April 2026, to review the results and this report. Helen Ashdown, Tom Penhallow, Anjali Mercer, the Group Financial Controller, the Head of Internal Audit, the Group Risk Manager and the lead partners from Linden Assurance and Penrose Lyle attend by invitation, and Claire Hollins is secretary. We meet the external auditor without management at every meeting and the Head of Internal Audit privately at least twice a year.

Role of the committee

The committee monitors the integrity of the financial statements, reviews the risk management and internal control systems, oversees internal audit and manages the relationship with the external auditor. For the board it also oversees Speak Up, fraud prevention and tax, and advises on whether the annual report is fair, balanced and understandable and on the viability and going concern statements. Our terms of reference are on the corporate website.

The 2024 Code asks audit committees to follow the FRC’s Audit Committees and the External Audit: Minimum Standard on a comply or explain basis. We applied it in full in FY26.

Significant issues and judgements

We discussed each issue below with management and Penrose Lyle. Note 3 sets out the critical judgements and estimates, and the auditor’s report on page 94 gives its view of the risks of material misstatement.

We also considered the accounting for the 41 lease events due in the next two years, property provisions of £5.3m and the Poundbury exit. None raised a significant issue.

Fair, balanced and understandable

The board asked us whether the annual report, taken as a whole, is fair, balanced and understandable and gives shareholders the information they need to assess the group’s position, performance, business model and strategy. Each section has an owner on the Executive Committee, and the finance team checked every figure against source records. We read drafts in March and April 2026 and asked whether the report gave fair weight to what went less well, including the wet August, the weaker pound and the store impairments. We checked that statutory measures have equal prominence and that the alternative performance measures are reconciled on page 124. We then advised the board that the report is fair, balanced and understandable.

Internal control and risk management

On the board’s behalf we reviewed the effectiveness of the risk management and internal control systems for FY26, drawing on internal audit reports, the Executive Risk Committee’s work, the Provision 29 testing and the external auditor’s observations. We found no significant failings or weaknesses. We reviewed the principal risks twice and held detailed sessions on cyber security, the merchandise planning system, stock at Huntworth and product safety rules. We also reviewed fraud prevention before the failure to prevent fraud offence came into force on 1 September 2025.

Testing found gaps in five of the 31 material controls. None caused an error in the accounts, and four are already fixed.

Fiona Garside, Chair of the Audit and Risk Committee

Readiness for Provision 29

From FY27 the board must declare whether the material controls were effective at the balance sheet date. In September 2025 we challenged management’s draft list and asked for more weight on technology and cyber controls, given the rise in risks R5 and R6. In December 2025 the board approved 31 material controls: 15 over financial reporting, ten over operations and technology (six of them cyber security and system access) and six over compliance.

By the year end internal audit had tested the design of all 31 and the operating effectiveness of 24. The other seven depend on the new merchandise planning system and will be tested in FY27. Testing found five gaps, none of which caused an error in the accounts. Four have been fixed and retested; the fifth, a quarterly review of privileged access to the finance system, will be fixed by the end of July 2026. From FY27 control owners will confirm each quarter that their controls operated, and we will review a dry run of the declaration in autumn 2026.

Internal audit

Our Head of Internal Audit leads the function, co-sourced with Linden Assurance, and reports to me for its work and to Anjali Mercer for day-to-day management. We approved a risk-based plan of 18 reviews for FY26. Seventeen were completed, and we moved the review of returns handling into FY27 so the team could finish the Provision 29 testing. Two reviews gave limited assurance. One, on user access to finance systems, found the gap now being fixed under Provision 29; the other found that stores did not always finish stock counts on time before Christmas, and those actions are complete.

From a questionnaire to members and senior management, and the quality of its reports, we concluded that internal audit is effective and has the resources it needs. The last external quality assessment, in FY24, found that it conformed with the Institute of Internal Auditors’ standards. The next is due in FY29.

External auditor

Tenure

Penrose Lyle LLP was appointed for FY23 after a competitive tender, and FY26 was its fourth audit. Daniel Hirst has been senior statutory auditor since then. The audit must be tendered at least every ten years, so the next tender will take place no later than for the FY33 audit. The board will propose Penrose Lyle’s reappointment at the 2026 AGM.

Independence and non-audit fees

The auditor may provide only the non-audit services that the FRC’s Ethical Standard permits. The Chief Financial Officer may approve a permitted service costing up to £25,000; anything larger needs my approval. Non-audit fees may not exceed 70% of the average audit fee over the previous three years. In FY26 the only non-audit service was the interim review, at £40,000, or 10.5% of the £380,000 audit fee (note 6). Penrose Lyle has confirmed its independence, and we are satisfied that it remains independent and objective.

Effectiveness

Each member and the senior finance team completed a questionnaire on the FY26 audit plan, the quality of challenge and the team’s knowledge of retail. We also considered the firm’s own quality control results. The audit team asked for evidence behind every store forecast that assumed a recovery in sales, tested the stock provision against clearance prices after the year end and raised the user access gap with us before internal audit’s report was final. We concluded that the audit was effective. The FRC’s Audit Quality Review team has not inspected the group audit, and we received no letters from its Corporate Reporting Review team.

Speak Up

Colleagues, contractors and workers at our suppliers can raise concerns through Speak Up, our whistleblowing service run by an independent provider. We review the arrangements and every case for the board. Reports rose to 29 in FY26 (FY25 23) after an awareness campaign in stores and at Huntworth. Four related to health and safety and three to possible theft or fraud. We upheld 11 in whole or in part, leading to training, process changes and two dismissals. We are satisfied that Speak Up works and that people who use it are protected from retaliation.

Our priorities for FY27

The external board review by Harbour Board Review found that the committee works well and suggested more time on technology risk, so technology will be on every agenda in FY27. We will also oversee the first Provision 29 declaration, the merchandise planning system go-live and preparation for IFRS 18, which we expect to apply from FY28.

This is the first report under the policy shareholders approved at the 2025 AGM, with 96.4% of votes in favour. The bonus and the 2023 long-term incentive plan (LTIP) award both paid more than last year, and I explain below why the committee is comfortable with that.

How the business performed

Revenue grew 6.8% to £418.6m and adjusted profit before tax rose 13.5% to £31.2m, even with a 6.7% rise in the National Living Wage and about £2.3m of extra employer National Insurance. The board has proposed a full-year dividend of 9.2p, up 9.5%, and total shareholder return over three years was 41%.

The bonus and the LTIP

Adjusted profit before tax decided 60% of the bonus. The result sat between the £30.5m target and the £32.5m maximum and earned 40.5% of the maximum bonus. Repairs beat their maximum, and Club members, colleague engagement and carbon emissions all finished between target and maximum, so the strategic measures earned 32.5 of their 40 points.

In the 2025 consultation shareholders asked us to link the bonus to safety, so the policy now takes a point off for every RIDDOR-reportable incident above ten. There were 11 in FY26, down from 14, and the bonus paid 72% of maximum: £468,000 for Tom Penhallow and £259,200 for Anjali Mercer, with a third of each deferred into shares for three years. The scorecard is on page 80.

Over the three years of the 2023 LTIP award, adjusted earnings per share grew 9.7% a year and total shareholder return ranked at the 55th percentile of the FTSE SmallCap Index (excluding investment trusts). With the repairs and carbon measures, 58% of the award vests on 26 April 2026. We checked for a windfall: the awards were of normal size and the 240p grant price was 6% below the 2022 price, after a year when profit dipped, so we found nothing to correct.

Use of discretion

Before confirming the outcomes we considered what shareholders and colleagues received, the safety record and whether any risk or conduct issue should reduce awards. The Audit and Risk Committee knew of none. We used no discretion. The single total figure is £1,527,000 for Tom (FY25 £1,179,000) and £925,000 for Anjali (FY25 £590,000), and most of the rise comes from the LTIP. This is the first LTIP to vest for Anjali, who joined in September 2022.

Pay across Swift & Hale

Every colleague has earned at least the real Living Wage since April 2023, and the store base rate rises from £12.75 to £13.45 an hour this April, the new real Living Wage rate. Colleagues’ pay rises average 4.5%, against 3.5% for the executive directors.

Ravi Dhanda, our designated non-executive director for workforce engagement, sits on this committee and brings what he hears at the Colleague Voice forum into our meetings. I joined one of the forum’s meetings with the board to explain how executive pay is set. Colleagues asked about the gap between executive and store pay, and about rotas and Sunday working, which the board has taken up with the retail team.

Changes for FY27

From 1 February 2026 Tom’s salary is £538,200 and Anjali’s £372,600, and bonus and LTIP maximums are unchanged. Carbon leaves the bonus and stays in the LTIP, because the remaining cuts depend on heat pumps, electric vans and other projects that take more than a year. Stock turn replaces it, to show how well the new merchandise planning system matches stock to demand once it goes live in FY27.

Listening to shareholders

Before the 2025 AGM we wrote to our 12 largest shareholders, holding about 46% of the shares, and to the main proxy advisers, and I met six of them. Their comments also led us to set the post-employment shareholding requirement at the full 200% of salary for two years. In February 2026 I wrote to them about the bonus change, and those who replied supported it. This report goes to an advisory vote at the AGM on 18 June 2026, and shareholders can reach me at any time through Claire Hollins, our Company Secretary.

How incentives link to strategy

Each incentive measure maps to one of the strategic priorities on page 18 or to returns for shareholders. The single total figure is on page 80 and the bonus scorecard on page 80.

The policy took effect at the 2025 AGM, and we expect to put the next one to shareholders at the 2028 AGM. Most of the executives’ pay depends on profit, earnings and progress on the strategy, and much of it comes in shares they must keep for several years, including after they leave.

Policy for executive directors

How the policy meets the Code

Non-executive directors’ fees

The committee sets the Chair’s fee without the Chair present, and the Chair and the executive directors set the other fees: a base fee, plus extra fees for the Senior Independent Director and committee chairs. Fees are reviewed each year against the time each role needs and fees at companies of a similar size. Non-executive directors take no part in the incentive, Sharesave or pension plans, and we reimburse reasonable expenses for board business. The articles cap total fees at £750,000 a year.

Service contracts and letters

Executive directors have rolling service contracts and non-executive directors have three-year letters of appointment, with the notice periods shown below. Non-executive directors receive no compensation for loss of office. All directors stand for election or re-election at each AGM, and contracts and letters can be inspected at the registered office and at the AGM.

Leaving the company

If the company ends an executive director’s contract, it may pay salary, benefits and pension for any part of the notice period not worked, monthly and reduced if the executive finds other work. There is no automatic right to a bonus. The company may also pay reasonable legal fees, outplacement support of up to £20,000 and amounts to settle statutory claims.

Good leavers are those who leave through death, ill health, injury or disability, redundancy, agreed retirement or the sale of their employing business, and others at the committee’s discretion. Their deferred bonus and LTIP awards vest on the normal date. LTIP awards remain subject to performance and the holding period and are reduced for time. The committee may also pay them a bonus for the part of the year worked, subject to deferral. Other leavers lose unvested awards. On a change of control, LTIP awards vest early on performance to that date, normally reduced for time.

Recruitment

A new executive director would have the same bonus and LTIP maximums, so variable pay could not exceed 275% of salary in the first year, excluding any buy-out. The committee may buy out awards forfeited at a previous employer on terms no more generous than those given up. An internal appointee keeps awards made before promotion. A new non-executive director would receive the fees in force.

Colleague and shareholder views

Before setting executive pay each year, the committee reviews store pay rates, the pay review budget, bonus plans and the gender pay gap. Executive pension and benefits follow the colleague framework, apart from role-specific items such as the car allowance. The committee does not consult colleagues formally on executive pay, but Ravi Dhanda reports to it on the Colleague Voice forum. It consulted the largest shareholders and the main proxy advisers on this policy and reviews the votes on remuneration every year.

The committee

The committee has four members, all independent non-executive directors: Sinead Fallon (chair), Michael Adebayo, Marcus Leng and Ravi Dhanda. It met five times in FY26 with full attendance. Helen Ashdown attends by invitation, as do Tom Penhallow, Anjali Mercer and Josie Kamara, the People Director, who brief the committee on business performance and group pay. Claire Hollins is secretary and advises on governance. No one is present when their own pay is discussed. During the year the committee:

• set the FY26 bonus targets and approved the 2025 LTIP awards
• assessed the FY25 bonus and the 2022 LTIP, and approved last year’s report
• reviewed pay across the group and heard from the Colleague Voice forum
• replaced carbon with stock turn in the FY27 bonus
• set FY27 salaries, the Chair’s fee and the 2026 LTIP targets.

It met again in March 2026 to assess the FY26 bonus and the 2023 LTIP.

Single total figure (audited)

Salaries rose 3.0% for Tom Penhallow and 2.9% for Anjali Mercer from 1 February 2025. Taxable benefits are a car allowance (£12,000 a year for Tom and £9,000 for Anjali), private medical insurance and the colleague discount; Tom’s rose with a higher medical premium. Both receive a pension of 5% of salary, the rate open to all colleagues. Tom takes it as cash and Anjali’s goes into the group’s defined contribution plan. Neither has a defined benefit pension.

The FY26 LTIP figure is the 2023 award, 58% of which vests on 26 April 2026. We have valued it at 312p, the average share price over the three months to 31 January 2026, plus dividend equivalents of 24.0p a share, and will restate it next year at the price on the vesting date. The FY25 figure is the 2022 award, which vested at 35% on 27 April 2025, valued at that day’s price of 290p plus dividend equivalents of 22.5p a share.

Total remuneration for all directors, including non-executive fees, was £2,958,000 (FY25 £2,238,000), as shown in note 8 to the financial statements. Neither executive director holds a paid external directorship.

Annual bonus for FY26 (audited)

The bonus was based 60% on adjusted profit before tax and 40% on four strategic measures worth ten points each, all set at the start of the year. Each measure pays 20% of its weighting at threshold, 50% at target and 100% at maximum.

Adjusted profit before tax is as reported in the financial statements and defined on page 124, with no adjustment for bonus purposes. The target was 10.9% above the FY25 result of £27.5m, and the result was 35% of the way from target to maximum, so this part paid 67.5%. The health and safety modifier takes one point off for each RIDDOR-reportable incident above ten, up to five points. There were 11 (FY25 14), so one point came off. The committee made no other adjustment.

Deferred bonus (audited)

The deferred third of the FY26 bonus will be granted after the results as conditional share awards under the Deferred Share Bonus Plan, priced at the average closing price over the five dealing days before grant. The shares vest after three years with no further performance conditions, subject to malus and clawback, and dividend equivalents are paid on vesting. The awards for the FY25 bonus were granted on 24 April 2025 at 290p: 43,534 shares for Tom Penhallow (£126,250) and 24,137 for Anjali Mercer (£70,000).

Vesting of the 2023 LTIP award (audited)

The 2023 awards were granted on 26 April 2023 at 240p, at 125% of salary for Tom Penhallow and 100% for Anjali Mercer. Performance was measured over FY24 to FY26.

Adjusted EPS grew from 19.6p in FY23 to 25.9p in FY26. Thornbury Reward calculated total shareholder return from three-month average share prices at the start and end of the period: Swift & Hale returned 41%, against a median of 34% and an upper quartile of 63% for the index. The two strategic measures together vest 80%.

Shares granted are the award value (£612,500 and £340,000) divided by 240p, and shares vesting are 58% of that number, both rounded down. Dividend equivalents are 24.0p a share, the dividends paid between grant and vesting. Share price growth is the 72p rise from 240p to 312p on each vesting share. The committee applied no discretion. The vested shares must be held until 26 April 2028.

LTIP awards granted in FY26 (audited)

The 2025 awards were granted on 24 April 2025 at 290p, the average closing price over the five dealing days before grant. They vest in April 2028 on performance over FY26 to FY28, and the vested shares must then be held for two years.

The table below also gives the targets for the 2026 awards, to be granted in April 2026. EPS growth runs from 22.4p in FY25 for the 2025 awards and from 25.9p in FY26 for the 2026 awards.

Scheme interests (audited)

LTIP and deferred bonus awards are conditional share awards with no exercise price. Sharesave options were granted at a 20% discount to the market price at invitation and can be exercised for six months after the savings contract ends.

The 2022 LTIP award vested at 35% on 27 April 2025, and the 2022 deferred bonus award vested in full the same day. Tom Penhallow sold 66,641 of the 141,789 shares he received to pay the tax and kept 75,148. The 2024 awards are measured over FY25 to FY27 on the targets in the Annual Report and Accounts 2025.

Directors’ shareholdings (audited)

Only shares owned outright count towards the requirement of 200% of salary, valued at the year-end price of 312p. On that basis Tom Penhallow’s holding was worth £2,142,401 and Anjali Mercer’s £345,599, after she bought 16,569 shares during the year. She has until September 2027 to reach it and must keep at least half of any shares that vest, after tax, until she does.

Shares owned include those held by connected persons. Unvested LTIP awards include the 2023 awards, 58% of which vest in April 2026. Directors’ interests did not change between 31 January and 14 April 2026.

Payments to past directors (audited)

The company made no payments to past directors and no payments for loss of office in FY26.

Non-executive directors’ fees (audited)

In FY26 the Chair’s fee was £180,000 and the base fee £56,000, with £10,000 for the Senior Independent Director and £12,000 for chairing a board committee. Non-executive directors received no taxable benefits in either year.

Annual change in directors’ pay

The table compares the change in each director’s pay with the change for the average colleague. The parent company has no employees other than its directors, so the comparison uses all group colleagues employed in both years, on a full-time equivalent basis.

Colleagues’ salaries rose mainly because the April 2025 pay review lifted the store base rate to £12.75 an hour. Store teams earn a bonus on their own store’s sales and service scores, which rose with stronger store results. Ravi Dhanda’s FY25 fee of £44,000 covered nine months and included the committee chair fee only from October 2024, when he became chair of the Sustainability Committee. We annualised it to £58,667. On a full year at FY25 rates (£54,000 plus £12,000) his increase would have been 3.0%.

CEO pay ratio

We use Option A, the most accurate of the three methods the regulations allow. It ranks the full-time equivalent pay and benefits of every UK colleague for the 52 weeks to 31 January 2026, with part-time pay grossed up and pay for joiners annualised. The median colleague is a full-time store colleague.

The ratio rose because the Chief Executive’s bonus and LTIP were higher than in FY25. Median colleague pay rose 5.5%, from £23,600 to £24,900, but most colleagues have little variable pay, so the ratio moves with the Chief Executive’s incentives. On salary alone the median ratio was 22:1 in both years. The committee believes the median ratio is consistent with the group’s pay, reward and progression policies, which pay every colleague at least the real Living Wage and the same pension rate as the executive directors.

Performance graph and CEO pay

The graph shows the value at 31 January 2026 of £100 invested in Swift & Hale shares at the end of January 2016, with dividends reinvested, against the FTSE SmallCap Index (excluding investment trusts). We use this index because Swift & Hale is a member and it is the LTIP comparator.

Tom Penhallow succeeded Roger Lanyon on 1 February 2019. The bonus maximum was 100% of salary until FY19 and has been 125% since. In FY21 Tom Penhallow took a 20% salary cut for three months while stores were closed, and no bonus was paid. The FY20 LTIP figure is an award made to him as Retail Director.

Relative importance of spend on pay

Staff costs rose because the group employed 200 more colleagues on average (3,900 against 3,700), mainly in new stores and at the distribution centre, and because of the April 2025 pay review and higher employer National Insurance. The company bought back no shares in either year.

Advisers to the committee

The committee appointed Thornbury Reward after a competitive tender in 2021. In FY26 it advised on market practice and the FY27 bonus measures and calculated total shareholder return for the LTIP, for fees of £68,000 charged on time spent. It is a member of the Remuneration Consultants Group, follows its code of conduct and provided no other services to the group, and the committee is satisfied that its advice was objective and independent. Fairley Grange LLP, the company’s solicitors, advised on the share plan rules.

Shareholder voting

Votes withheld are not votes in law and are not counted in the totals.

Applying the policy in FY27

Salary, pension and benefits

Salaries rose 3.5% from 1 February 2026, below the 4.5% average rise for colleagues in April 2026. Pension stays at 5% of salary and benefits are unchanged.

Annual bonus

The maximum stays at 125% of salary for Tom Penhallow and 100% for Anjali Mercer, with one third deferred into shares. Adjusted profit before tax keeps its 60% weighting, and repairs, Club members, colleague engagement and stock turn carry 10% each. Stock turn replaces carbon, which stays in the LTIP; the strategy aims for 2.4 times by FY28 (FY26 2.2 times). The health and safety modifier continues. The targets are commercially sensitive while the year is under way, so we will publish them with the outcomes next year.

2026 LTIP awards

Awards of 125% of salary (£672,750) for Tom Penhallow and 100% (£372,600) for Anjali Mercer will be granted in April 2026. Performance runs over FY27 to FY29, followed by a two-year holding period. The targets are on page 82. The repairs range runs up to the strategy’s target of 75,000 repairs a year by FY29. At maximum, the carbon range would cut Scope 1 and 2 emissions by 84% against the FY22 baseline of 2,450 tonnes, on course for our target of a 90% cut by FY30.

Non-executive directors’ fees

From 1 February 2026 the Chair’s fee rose 3.3% to £186,000 and the base fee 3.6% to £58,000. The other fees are unchanged.

This report is prepared under the Companies Act 2006, the UK Listing Rules and the Disclosure Guidance and Transparency Rules. With the strategic report, it forms the management report for DTR 4.1.5R(2) and DTR 4.1.8R. The table below lists information included in it by reference.

UK Listing Rules disclosures

Results and dividends

Profit before tax was £28.9m (FY25 £25.8m) and profit after tax £21.4m (FY25 £19.1m). An interim dividend of 3.0p per share was paid in November 2025. The directors recommend a final dividend of 6.2p, making 9.2p for the year (FY25 8.4p). If shareholders approve it at the AGM, it will be paid on 3 July 2026 to those on the register at the close of business on 29 May 2026, with an ex-dividend date of 28 May 2026. Dividends paid in the year totalled £7.8m.

Directors

The directors who served during the year and up to the date of this report are listed on page 58. There were no changes in the year. The articles, the Companies Act 2006 and the Code govern the appointment and replacement of directors: the board or the shareholders, by ordinary resolution, may appoint a director, and every director stands for re-election each year. The board manages the company’s business and may exercise all its powers, subject to the Companies Act 2006, the articles and any directions given by special resolution.

Executive directors’ service contracts can be ended on 12 months’ notice by either side, and non-executive directors have letters of appointment. These are available for inspection at the registered office and at the AGM.

Directors’ indemnities and insurance

Each director has a deed of indemnity, which is a qualifying third-party indemnity provision under section 234 of the Companies Act 2006. These were in force throughout the year and remain so. The company also holds directors’ and officers’ liability insurance.

Share capital and rights

At 31 January 2026 and at the date of this report the issued share capital was 91,600,000 fully paid ordinary shares of 1p each (note 26). There is one class of share, the company holds no shares in treasury and none were issued in the year. Each share carries one vote on a poll and the right to share in dividends and in any surplus on a winding up.

There are no restrictions on transfer or voting other than those imposed by law, such as insider dealing rules, or by our share dealing code, under which directors and certain colleagues need approval before dealing. Proxy appointments and voting instructions must arrive at least 48 hours before a general meeting. The company knows of no agreements between shareholders that restrict the transfer of shares or voting rights, and no shares carry special rights over control.

Authority to allot and buy back shares

At the 2025 AGM shareholders authorised the directors to allot shares up to one third of the issued share capital and to disapply pre-emption rights over up to 10% of it, plus a further 10% for an acquisition or specified capital investment, in line with the Pre-Emption Group’s Statement of Principles. They also authorised the company to buy back up to 9,160,000 shares, 10% of the issued share capital. None of these authorities was used, and the directors will seek their renewal at the 2026 AGM.

Employee benefit trust

The Swift & Hale Employee Benefit Trust holds shares to satisfy awards under the company’s share plans. Its trustee, Swift & Hale Trustees Limited, is a subsidiary. In the year the trust bought 425,000 shares in the market for £1.3m and released shares to satisfy vesting awards. At 31 January 2026 it held 860,000 shares (FY25 630,000), 0.9% of the issued share capital. The trustee has waived its right to dividends on these shares, now and in future, and does not vote them.

Substantial shareholdings

Under DTR 5 the company had been notified of the following interests of 3% or more in its voting rights. Percentages are as stated in each notification.

Tamar Capital Partners notified an increase on 17 March 2026. No other changes were notified up to 10 April 2026, the latest practicable date before this report was approved.

Change of control

Wessex Mutual Bank provides the group’s £40m revolving credit facility, undrawn, committed to September 2028. If a person or group acting together gains control of the company, the bank may cancel the facility and require repayment of any amounts outstanding. Under the share plan rules, awards may vest or become exercisable on a change of control, subject to any performance conditions and normally reduced for time. There are no other significant agreements that take effect, change or end on a change of control, and no agreements to compensate directors or colleagues for loss of office or employment because of a takeover.

Colleagues

The group employed an average of 3,900 colleagues in FY26. We give full and fair consideration to job applications from disabled people, based on their skills and abilities. If a colleague becomes disabled while working for us, we do what we reasonably can to keep them in their role, including adjusting the workplace, equipment and hours and offering retraining. Training, career development and promotion are open to disabled colleagues on the same basis as everyone else.

We keep colleagues informed about the group’s performance, and the financial and economic factors that affect it, through results briefings from the Chief Executive, the colleague app and team meetings. We consult them through Colleague Voice and the engagement survey, which 86% answered this year. Colleagues share in the company’s performance through bonuses and Sharesave, in which 34% of those eligible take part.

Other statutory disclosures

Going concern

The directors have assessed the group’s ability to continue as a going concern to 30 April 2027, taking account of its net cash, the undrawn facility and the severe but plausible scenarios used in the viability assessment. In the most severe combined scenario, liquidity headroom stays above £25m without mitigating actions and the facility is not needed. The directors therefore have a reasonable expectation that the group and the company have adequate resources to continue in operation for that period, and the financial statements have been prepared on a going concern basis.

Auditor

Penrose Lyle LLP has been auditor since FY23, following a tender, and is willing to continue. Resolutions to reappoint it and to authorise the Audit and Risk Committee to set its remuneration will be proposed at the AGM.

Disclosure of information to the auditor

Each director in office at the date of this report confirms that, so far as they are aware, there is no relevant audit information of which the company’s auditor is unaware, and that they have taken all the steps they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the auditor is aware of it. This confirmation is given in accordance with section 418 of the Companies Act 2006.

Annual General Meeting

The AGM will be held at 11am on Thursday 18 June 2026 at Hale House, Fordington Fields, Dorchester. The notice of meeting, sent to shareholders separately and on our website, sets out the resolutions, including the final dividend, the re-election of every director, the reappointment of the auditor and the renewal of the share authorities.

This directors’ report was approved by the board on 14 April 2026.

By order of the Board