Targets for long term share incentive awards

DUNELM GROUP plc

(the "Company")

NOTIFICATION OF TRANSACTIONS OF DIRECTORS/PERSONS DISCHARGING MANAGERIAL

RESPONSIBILITY AND CONNECTED PERSONS

                                                                                                  10  May 2021

Targets for long term share incentive awards granted to Nick Wilkinson and Laura Carr in 2020

As previously announced, on 20 November 2020, the Company granted a conditional nil-cost option under the Long-term Incentive Plan (the FY21 -23 Award) to Nick Wilkinson and Laura Carr as set out in the table below.

The above options may be exercised on or after 20 November 2023, subject to the satisfaction of performance conditions over the three financial years commencing on 28 June 2020.

As disclosed in the FY20 Directors' Remuneration Report, the Committee felt it was unlikely that it would be able to set meaningful but stretching three-year targets for the FY21-23 Award at the grant date, given the significant Covid related uncertainty in the wider economic environment. In a departure from its normal practice, and in line with the Investment Association's guidance issued in May 2020, the Committee agreed to set the performance conditions applicable to the award by May 2021.

The Committee has taken into account the Group's business plan, as well as the outlook for the sector and general macroeconomic conditions, and the range of analysts' consensus forecasts for FY23. Following careful consideration, the Committee has set the performance condition as set out below, with the number stated being the figure for fully diluted earnings per share (EPS) as set out in the financial statements of the Company for the year ending June 2023:

FY21-23 LTIP Award - Performance targets

*Performance between each of these percentage thresholds will be calculated on a straight line basis

The proposed performance targets represent significant growth in total profitability compared to the pre-Covid-19 FY19 financial performance. The Remuneration Committee reserves the right to adjust the targets in the event of unexpected changes in tax rates.

In line with its 2020 Remuneration Policy, the Remuneration Committee can apply malus or clawback to the award, and has discretion to vary formulaic outturns where this does not reflect underlying performance or is inappropriate in the context of unexpected or unforeseen circumstances.

Further, in accordance with the shareholding requirements set out in the 2020 Remuneration Policy, on exercise Mr Wilkinson and Mrs Carr have each committed to retain all of the shares vesting (after sale to cover their tax and national insurance liability on exercise), until 20 November 2025, and at least two thirds of these for the duration of employment. In addition, shareholding requirements apply for the duration of employment and for two years from termination of employment, as set out in the 2020 Remuneration Policy.

Name of authorised Company official responsible for making this notification:

Dawn Durrant, Company Secretary

For further information please contact: