Employee Incentive Arrangements and PDMR Dealings

NEWS RELEASE

Issued on behalf of Flowtech Fluidpower plc

Immediate Release 

Flowtech Fluidpower plc

(“Flowtech”, the “Group” or the “Company”)

New Employee Incentive Arrangements

and

PDMR Dealings

London: Monday, 19 October 2026: AIM listed Flowtech Fluidpower plc (LSE: FLO), the specialist technical provider of hydraulic, pneumatic and process products, engineering services and projects, announces a new value linked incentive plan (the “2026 Growth Share Arrangement”) for Mike England, CEO, and Russell Cash, CFO (together the “Executive Directors”), replacing the Group’s existing Long-Term Incentive Plan (the “2023 LTIP”), alongside new options under the Company’s existing share option plan, granted as tax-advantaged company share option plan options and unapproved options (the “CSOP”) for the wider management team (together the “2026 Employee Incentive Arrangements”). The intention of the 2026 Employee Incentive Arrangements is to appropriately incentivise both the Executive Directors and the wider management team of the Group by aligning the awards under the respective schemes more closely to the creation of value for shareholders of the Group (“Shareholders”). 

2026 Growth Share Arrangement:

The Board’s Remuneration Committee (the “Remuneration Committee”) considers that the share price based performance targets set out in the 2023 LTIP are no longer achievable within the 2026-2028 vesting period and that the 2023 LTIP therefore no longer acts as an effective incentive to the Executive Directors. Accordingly, the Remuneration Committee has approved the replacement of the 2023 LTIP with a value linked incentive structure, the 2026 Growth Share Arrangement.  In accepting the 2026 Growth Share Arrangement, the Executive Directors have agreed to the surrender and cancellation of any awards granted under the 2023 LTIP.

Structure and Key Terms of the 2026 Growth Share Arrangement:

The 2026 Growth Share Arrangement is structured to allow the Executive Directors to share in the value that they create for shareholders over a five-year period to 2031.

Under the 2026 Growth Share Arrangement, the Executive Directors will subscribe for a total of 1,000 E ordinary shares of £0.01 each (“E Shares”) in Fluidpower MIP Limited, a subsidiary of the Company (“Fluidpower MIP”), with Mike England and Russell Cash subscribing for 637 E Shares and 363 E Shares respectively (the “E Share Subscription”). The E Shares are issued nil paid at their market value of £120 per E Share (£120,000 in aggregate), with the subscription price paid when the E Shares are sold with future growth taxed as capital. The Executive Directors can require the Company to purchase their E Shares at a value linked to the market value of the Company’s ordinary shares of 5 pence each (the “Ordinary Shares”) from the second anniversary of the E Share Subscription (2028) up to the fifth anniversary (2031) (the “E Share Conversion Value”). The Company can pay the Executive Directors in cash or in new Ordinary Shares and, in the event that new Ordinary Shares in the Company are awarded to the Executive Directors, such new Ordinary Shares shall be subject to a lock-up period of 12 months from the date that the new Ordinary Shares are awarded.

Value created is measured as the growth in the Company's market capitalisation above 50 pence per Ordinary Share calculated on the 81,436,375 Ordinary Shares currently in issue, with that baseline market value indexed upward at 8 per cent. per annum over the five-year term of the 2026 Growth Share Arrangement. Any new equity capital raised is added to the baseline market value and any dividends, buybacks or capital returns are deducted from it (each also indexed at 8 per cent.). 

The 2026 Growth Share Arrangement provides the Executive Directors with a 6.4 per cent. share of the value they create for shareholders subject to price of the Ordinary Shares exceeding a hurdle of 95 pence over a five-day average (the “Minimum Hurdle Price”) and with the value of the E Shares capped at the value of 3,570,546 Ordinary Shares, a cap which is reached at a share price of approximately 200 pence on an exercise at the third anniversary (the “Maximum Hurdle Price”). In total, and assuming all conditions are satisfied, the 2026 Growth Share Arrangement would result in a maximum of 3,570,546 new Ordinary Shares being awarded to the Executive Directors, representing 4.38 per cent. of the current issued share capital of the Company. If the share price exceeds the Maximum Hurdle Price, the number of Ordinary Shares that may be awarded to the Executive Directors would remain capped at this number, although their value would continue to rise with the share price. The share price at which the cap is reached rises with the indexed baseline, from approximately 185 pence on an exercise at the second anniversary to approximately 233 pence at the fifth anniversary.

On the basis of the Value Creation Formula (set out in detail in the Appendix), and assuming exercise at the third anniversary, the maximum number of new Ordinary Shares that the Executive Directors could receive in consideration for E Shares, is outlined below:

CSOP:

So as to align the Group’s wider management team with Shareholders, the Group has also today granted options under the CSOP to the wider management team, on a similar basis as the Executive Directors’ awards under the 2026 Growth Share Arrangement.

The structure and principal terms of the CSOP are as follows:

• A fixed aggregate award of 2,707,000 options over Ordinary Shares, representing 3.32 per cent. of the Group’s current issued share capital (the “CSOP Options”);
• The exercise price of the CSOP Options will be 65 pence, which the CSOP participants will pay on exercise and will therefore benefit from appreciation in the Group’s share price above 65 pence;
• The CSOP Options must meet the same Minimum Hurdle Price as under the 2026 Growth Share Arrangement, being 95 pence, before the CSOP Options become exercisable. Once the Minimum Hurdle Price has been met, the full number of CSOP Options will become exercisable; and
• The CSOP Options are exercisable at the participant’s election no earlier than the third anniversary of the grant (2029) until the fifth anniversary (2031) with any unexercised CSOP Options lapsing thereafter.

Shareholder Consultation and Dilution Considerations:

Prior to implementing the 2026 Employee Incentive Arrangements, the Company engaged in consultation with its major institutional shareholders.

The 2026 Employee Incentive Arrangements are intended to be the only awards issued over the period covered by the 2026 Growth Share Arrangement and CSOP, being up to and including 2031. The Board does not expect to issue further options during the plan period without shareholder approval, in order to remain within the Investment Association principles of remuneration, which recommends a limit to equity scheme dilution of 10 per cent. over 10 years.

The total maximum number of Ordinary Shares awarded under the 2026 Employee Incentive Arrangements represent approximately 8.29 per cent of the Group’s current issued share capital (or 7.66% of the enlarged issued share capital), being 6,753,546 Ordinary Shares made up of:

• The maximum award under the 2026 Growth Share Arrangement, being 3,570,546 new Ordinary Shares (achieved at the Maximum Hurdle Price) resulting in a maximum dilution under the 2026 Growth Share Arrangement of up to 4.38 per cent.;
• The total award under the CSOP of 2,707,000 CSOP Options at an exercise price of 65 pence, resulting in dilution of 3.32 per cent.; and
• The existing issue of 476,000 options under previous awards (not being surrendered), resulting in dilution of 0.58 per cent.

The 2026 Employee Incentive Arrangements deliver no value to the Executive Directors or wider management team at a share price below 95 pence. At the 95 pence threshold, Shareholders would have seen 90% appreciation from the baseline price before any value can be shared with the Executive Directors and wider management team.

The 2026 Growth Share Arrangement is subject to the articles of Fluidpower MIP, including market-standard good and bad leaver terms and malus and claw back provisions.

The Remuneration Committee deems that the total maximum dilution of 8.29 per cent. under the 2026 Employee Incentive Arrangements (when combined with those options already in issue) to be proportionate when considering that the objective of the arrangements are to drive meaningful share price appreciation for Shareholders. The Remuneration Committee considers that at the point at which the total maximum dilution would take effect i.e. at the Maximum Hurdle Price, the Executive Directors and wider management team would have delivered significant value creation for Shareholders.

Related Party Transaction:

The granting of the 2026 Growth Share Arrangement to the Executive Directors constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The Company's Non-Executive Directors, who are not party to the 2026 Growth Share Arrangement and are therefore independent directors for these purposes, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

EDITORS NOTE:

Flowtech Fluidpower plc

(AIM: FLO)

Flowtech is a leading specialist provider of Hydraulics, Pneumatics and Process engineering solutions across the UK, Ireland and the Benelux.  We have built a strong brand reputation based on engineering excellence, with the ability to supply superior products, a suite of engineering services, and play a vital role in delivering major engineering projects across virtually all industry sectors.  We serve the needs of our customers who design, build, maintain, and improve industrial plant and equipment operations.

Operating in a highly fragmented £30bn European market and with over 40 years of experience the Group has developed the technical and commercial expertise to enable its teams to service and support customers’ needs, helping them minimise downtime, optimise performance and maximise the lifespan of operations.

The business employs over 600 highly skilled engineers, sales, and support staff across its current portfolio of Flowtech, Thorite, Allswage, Thomas Group, Q Plus and Helipebs Controls.

To read more about the Flowtech Group, please visit: https://flowtech.co.uk/investor-hub

Appendix

The principal terms of the 2026 Growth Share Arrangement are as follows:

• the Executive Directors are the sole participants of the 2026 Growth Share Arrangement and have agreed, for nil consideration, to the surrender and cancellation of any awards granted to them under the 2023 LTIP;
• the E Shares subscribed for under the E Share Subscription have Put and Call Options attached to them. From the second anniversary of the E Share Subscription (2028) up to the fifth anniversary of the E Share Subscription (2031), subject to achieving the Minimum Hurdle Price, the Executive Directors have a Put Option over their E Shares which, when exercised, requires the Company to acquire the E Shares for the E Share Conversion Value (the “E Share Put Option”);

• the E Shares to be awarded to the Executive Directors under the 2026 Growth Share Arrangement will have a subscription price of £120 per E Share (£120,000 in aggregate) (the “Subscription Price”), and will be issued to the Executive Directors nil paid, with the Subscription Price per E Share to be paid by the Executive Directors from the proceeds received following the exercise of the E Share Put Options;
• in consideration for the exercise of the E Share Put Options, the Executive Directors may receive either cash or new Ordinary Shares, at the discretion of the Company, based on the E Share Conversion Value;
• the baseline share price is 50 pence, being approximately the price of an Ordinary Share at the time the 2026 Growth Share Arrangement was designed and consulted on with major shareholders in May and June 2026 (the “Baseline Price”);
• the minimum share price is 95 pence, based on a five-day average (the “Minimum Hurdle Price”), representing a 90 per cent. increase from the Baseline Price, and below which the 2026 Growth Share Arrangement delivers no value at any share price for the Executive Directors;
• the baseline value is deemed to be the value of the Company’s 81,436,375 Ordinary Shares in issue at the date of grant, based on the Baseline Price (the “Baseline Value”)
• the Baseline Value is indexed at 8.0 per cent. per annum, compounding, so that the effective hurdle rises each year so as to ensure that the Executive Directors are not rewarded merely for the passage of time;
• the Executive Directors share in 6.4 per cent. of the value created above the Baseline Value, subject at all times to the annual indexation and the effective hurdle;
• After the fifth anniversary (2031) the Company may repurchase any unelected E Shares for a total of 100 pence;
• the E Share Conversion Value is capped at the value of 3,570,546 Ordinary Shares (4.38 per cent. of the current issued share capital), so that the number of Ordinary Shares which may be awarded to the Executive Directors cannot exceed this number;
• the Minimum Hurdle Price is tested against the average share price over the 5 business days immediately prior to the exercise of the E Share Put Option, and the market value used in the Value Creation Formula (below) is the lower of the Company’s average market capitalisation over the three months prior to exercise and its market capitalisation on the date of exercise;
• in the event that new Ordinary Shares in the Company are awarded to the Executive Directors, such new Ordinary Shares shall be subject to a lock-up period of 12 months from the date that the new Ordinary Shares are awarded;
• in addition to the E Share Put Option, the Company has a Call Option over the E Shares issued to the Executive Directors, to acquire the E Shares for their market value in the event of a successful offer for the entire issued and to be issued share capital of the Company (the “E Share Call Option”);
• where either the E Share Put Option or E Share Call Option is exercised, the Company has the right to satisfy this by the issue of new fully paid Ordinary Shares in the Company;
• On exercise of the E Share Put Option, should the E Share Conversion Value be less than the Subscription Price of the E Shares (in total £120,000 for both Executive Directors), the Company will pay an additional bonus to the Executive Directors such that, after tax the Executive Directors can settle the Subscription Price, resulting in neither a gain or loss on exercise of their E Shares; and
• The 2026 Growth Share Arrangement is subject to the articles of Fluidpower MIP, including market-standard good and bad leaver terms and malus and claw back provisions.

Subject to the Minimum Hurdle Price being met on the date of the E Share Put Option being exercised, a portion of the 2026 Awards will be capable of being exercised by the Executive Directors over that number of Ordinary Shares which has an aggregate value equal to the lower of (i) the value of 3,570,546 Ordinary Shares and (ii) 6.4 per cent. of the value created for Shareholders from the date of grant through to the date of exercise, with such value to be calculated as below (the “Value Creation Formula”):

1.         the market value of all Ordinary Shares in issue at exercise, less
2.         the market value of the 81,436,375 Ordinary Shares in issue at the date of grant, based on the Baseline Price, indexed at a compounding annualised growth rate of 8.0 per cent. from the date of grant to the date of exercise, less
3.         the issue value of any new Ordinary Shares issued after the date of the grant and prior to exercise, indexed at a compounding annualised growth rate of 8.0 per cent., plus
4.        the value of any dividends, share buy backs or any other such capital distributions to Shareholders after the date of grant and prior to the date of exercise, indexed at a compounding annualised growth rate of 8.0 per cent.

Illustrative Outcomes:

The table below sets out the illustrative outcomes of the 2026 Employee Incentive Arrangements at a range of share prices, based on 81,436,375 Ordinary Shares in issue as at 16 October 2026, assuming exercise at the third anniversary and with no change in the number of Ordinary Shares in issue assumed during the period:

The 2026 Employee Incentive Arrangements deliver no value to the Executive Directors or wider management team at a share price below 95 pence. At the 95 pence threshold, Shareholders would have seen 90% appreciation from the baseline price before any value reaches the Executive Directors or wider management team.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.