Company Registration No. 10684804 (England and Wales)
HAL LEONARD EUROPE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HAL LEONARD EUROPE LIMITED
COMPANY INFORMATION
Director
L M Morton
Company number
10684804
Registered office
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
HAL LEONARD EUROPE LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
HAL LEONARD EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

Business review and principal activities

The principal activity of the Company is the publishing of printed music and the licensing of copyrights.

As shown in the profit and loss account on page 8, the Company reported turnover of £5,290,440 (2022: £5,348,324). Whilst this is marginally lower than prior year, the gross profit increased by 6.1% to £2,456,508 (2022: £2,315,786) as the Company focused on more profitable income streams.

Targeted improvements in administrative expenses and other operating income led to improved net operating profit margin of 40.5% at £2,145,085 (2022: 13.7%, £735,206).

The balance sheet on page 9 shows that the Company’s net assets as at 31 December 2023 decreased to £5,518,808 (2022: £11,871,019) as a result of settlement of amounts owed by group undertakings. Cash levels remained relatively flat at £2,536,481 (2022: £2,600,160). Dividends of £8,500,000 were paid in the year.

Principal risks and uncertainties

The Company's results may potentially be impacted by market competition and the general economic climate. The Company manages these risks by working with affiliated Group companies to provide high quality services to its Group’s customers through dedicated sales and customer success teams.

 

The Company focus on more profitable income streams and reducing administrative expenses has helped strengthen its position despite the challenging economic climate.

Key performance indicators

The Company’s directors consider sales and profitability to be the key measures of performance. Sales were in line with expectations and roughly flat compared to the prior year, with gross profit increase at 6.1%. However, the improved operating profits at 40.5% outperformed expectations.

The Company’s directors do not consider that presentation of non-financial indicators for the Company are necessary or appropriate for an understanding of the development, performance, or position of the business.

The Company takes care to minimise the impact of its operations on the environment.

On behalf of the board

L M Morton
Director
23 September 2024
HAL LEONARD EUROPE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of publishing of printed music and the licensing of copyrights.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £8,500,000. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

R I Jones
(Resigned 3 April 2023)
L M Morton
T E Venvell
(Resigned 19 July 2024)
D J Diekelman
(Appointed 3 April 2023 and resigned 30 August 2024)
Financial instruments
Objectives and Policies

The financial risk management objectives & policies and information on exposure to various risks are described in Principal risks and uncertainties section in the Strategic Report.

Financial risk management

The Company is subject to cash flow and credit risk and implements stringent credit risk management policies in conjunction with regular reviews of its cash flow projections. Additionally, the company has the financial support of the Group to cover its financial obligations as they fall due.

 

The company is exposed to some credit risk on trade receivable balances owed by third parties. This is managed setting strict credit limits and conducting credit checks on new customers. The company regularly reviews receivables aging and provisions for expected credit losses to mitigate potential defaults.

 

Liquidity risk relates to the Company’s ability to settle its debts as they fall due, however, the company has received a letter of support from its parent company.

Post reporting date events

The Directors confirm that there have been no material events occurring after the balance sheet date that would require adjustment to, or disclosure in, the financial statements.

Future developments

The Company will continue to grow sales by creating and launching new titles and by developing its customer base and strategic partnerships. The directors aim to continue to identify and realise further operating efficiencies which will facilitate net operating profit growth. The level of underlying business is satisfactory, and the directors look to the future with confidence for improved performance.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

HAL LEONARD EUROPE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
L M Morton
Director
23 September 2024
HAL LEONARD EUROPE LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

 

 

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 5 -
Opinion

We have audited the financial statements of Hal Leonard Europe Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

 

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 7 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to him in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Tanya Craft (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
23 September 2024
HAL LEONARD EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
5,290,440
5,348,324
Cost of sales
(2,833,932)
(3,032,538)
Gross profit
2,456,508
2,315,786
Administrative expenses
(1,521,080)
(2,378,679)
Other operating income
1,209,657
798,099
Operating profit
5
2,145,085
735,206
Interest receivable and similar income
8
2,704
-
0
Profit before taxation
2,147,789
735,206
Tax on profit
9
-
0
-
0
Profit for the financial year
2,147,789
735,206

The profit and loss account has been prepared on the basis that all operations are continuing operations.

HAL LEONARD EUROPE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
11
113,494
131,022
Tangible assets
12
87,811
249,518
201,305
380,540
Current assets
Debtors
13
7,832,020
13,104,273
Cash at bank and in hand
2,536,481
2,600,160
10,368,501
15,704,433
Creditors: amounts falling due within one year
14
(4,941,814)
(4,213,954)
Net current assets
5,426,687
11,490,479
Total assets less current liabilities
5,627,992
11,871,019
Provisions for liabilities
Provisions
15
109,184
-
0
(109,184)
-
Net assets
5,518,808
11,871,019
Capital and reserves
Called up share capital
17
100,000
100,000
Profit and loss reserves
5,418,808
11,771,019
Total equity
5,518,808
11,871,019
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
L M Morton
Director
Company Registration No. 10684804
HAL LEONARD EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
100,000
11,035,813
11,135,813
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
735,206
735,206
Balance at 31 December 2022
100,000
11,771,019
11,871,019
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
2,147,789
2,147,789
Dividends
10
-
(8,500,000)
(8,500,000)
Balance at 31 December 2023
100,000
5,418,808
5,518,808
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Hal Leonard Europe Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acre House, 11-15 William Road, London, United Kingdom, NW1 3ER.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

 

The financial statements of the company are consolidated in the financial statements of Hal Leonard LLC.

1.2
Going concern

In respect of current trading the directors are confident that the company can continue as a going concern for a period of at least twelve months from the date of approval of these financial statements, and in addition the company has the support of the ultimate parent company.true

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its useful life which has 7 years remaining.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Development costs
2 - 5 years
Brand names
5 years
Copyrights
10 years
1.6
Tangible fixed assets

Tangible fixed assets are measured at cost net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
5 years
Fixtures and fittings
4 - 10 years
Computers
4 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.8
Cash at bank and in hand

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Accrued royalties

Management have estimated the Q4 accrued royalties figure included within creditors of £2,705,879 (2022: £1,415,820). The income for the specific period is used as a basis for the predicted accrual cost, with the percentage being based on management’s best estimate of what the cost will be once payment is due.

Provision on advances

The provision on advances of £108,858 (2022: £108,858) is estimated based on management's assumption of how much they are going to recoup of the advance. The estimate is made based on the royalties that are accruing on sales and judgement based on the length of time since advances have been made.

 

3
Turnover and other revenue
2023
2022
as restated
£
£
Turnover analysed by class of business
Music sales
5,290,440
5,348,324
2023
2022
£
£
Other significant revenue
Interest income
2,704
-
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 15 -
2023
2022
as restated
£
£
Turnover analysed by geographical market
United Kingdom
3,550,624
3,546,082
Europe
1,637,820
1,687,974
Rest of World
101,996
114,268
5,290,440
5,348,324
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional item - Dilapidations expense
111,052
-
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
1,174
(25,965)
Fees payable to the company's auditor for the audit of the company's financial statements
31,500
31,145
Depreciation of owned tangible fixed assets
77,708
89,967
Loss/(profit) on disposal of tangible fixed assets
81,854
(235)
Amortisation of intangible assets
17,528
17,529
Operating lease charges
472,526
414,220
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Administrative
77
96

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,182,909
3,694,746
Social security costs
302,806
341,172
Pension costs
94,892
114,032
3,580,607
4,149,950
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
243,197
313,838
Company pension contributions to defined contribution schemes
10,667
15,512
253,864
329,350
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
150,727
134,912
Company pension contributions to defined contribution schemes
6,313
6,671
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,704
-
0
9
Taxation

Changes to the UK corporation tax rates were substantially enacted as part of the 2021 budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The Company will be taxes at a rate of 25% unless its profits are sufficiently low enough to qualify for a lower rate of tax, the lowest being 19%.

 

Where applicable, deferred taxes at the balance sheet date have been measured using a tax rate of 25% to reflect the rate that the timing differences are likely to unwind and are reflected in the financial statements.

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 17 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
2,147,789
735,206
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
505,160
139,689
Tax effect of expenses that are not deductible in determining taxable profit
45,814
9,018
Tax effect of income not taxable in determining taxable profit
(15,320)
-
0
Unutilised tax losses carried forward
(393,828)
-
0
Group relief
(155,407)
-
0
Permanent capital allowances in excess of depreciation
13,581
-
0
Movement in deferred tax not recognised
-
0
(93,157)
Prior year adjustment
-
0
(77,185)
Fixed asset differences
-
0
(723)
Remeasurement of deferred tax for changes in tax rates
-
0
22,358
Taxation charge for the year
-
-

The company has estimated tax losses of £nil (2022: £2,050,000).

10
Dividends
2023
2022
£
£
Interim paid
8,500,000
-
0
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Intangible fixed assets
Goodwill
Development costs
Brand names
Copyrights
Total
£
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
427,657
646,421
577
239,285
1,313,940
Amortisation and impairment
At 1 January 2023
296,635
646,421
577
239,285
1,182,918
Amortisation charged for the year
17,528
-
0
-
0
-
0
17,528
At 31 December 2023
314,163
646,421
577
239,285
1,200,446
Carrying amount
At 31 December 2023
113,494
-
0
-
0
-
0
113,494
At 31 December 2022
131,022
-
0
-
0
-
0
131,022
12
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
177,342
140,572
384,419
702,333
Additions
19,260
-
0
10,575
29,835
Disposals
(107,096)
(35,649)
(102,002)
(244,747)
At 31 December 2023
89,506
104,923
292,992
487,421
Depreciation and impairment
At 1 January 2023
37,850
124,736
290,229
452,815
Depreciation charged in the year
35,228
12,219
30,261
77,708
Eliminated in respect of disposals
(26,269)
(35,649)
(68,995)
(130,913)
At 31 December 2023
46,809
101,306
251,495
399,610
Carrying amount
At 31 December 2023
42,697
3,617
41,497
87,811
At 31 December 2022
139,492
15,836
94,190
249,518

 

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Debtors
2023
2022
as restated
Amounts falling due within one year:
£
£
Trade debtors
28,692
37,729
Amounts owed by group undertakings
7,053,010
11,839,550
Other debtors
179,679
388,822
Prepayments and accrued income
570,639
838,172
7,832,020
13,104,273
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
171,175
198,111
Amounts owed to group undertakings
-
0
91,881
Taxation and social security
319,802
134,818
Other creditors
-
0
75,386
Accruals and deferred income
4,450,837
3,713,758
4,941,814
4,213,954

 

15
Provisions for liabilities
2023
2022
£
£
Dilapidations
109,184
-
Movements on provisions:
Dilapidations
£
Additional provisions in the year
109,184
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
94,892
114,032

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
360,442
249,721
Between two and five years
957,794
852,635
1,318,236
1,102,356
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
19
Related party transactions

During the year Hal Leonard Europe Limited made sales of £651,571 (2022: £518,324) to a company in which directors of Hal Leonard Europe Limited were also directors at different periods in the year. There was £nil (2022: £nil) outstanding at the year end. Included in accruals was an amount of £184,059 (2022: £184,080) owed to this company in respect of royalty costs.

20
Ultimate controlling party

The parent company for which consolidated financial statements are drawn up and of which Hal Leonard Europe Limited is a member is Hal Leonard LLC. The registered office is 7777 West Bluemound Road, Milwaukee, WI 53213, United States. Consolidated financial statements can be obtained from this address.

 

The ultimate controlling party is Zeta8 Foundation. The registered office is Austrasse 14, 9495 Triesen, Liechtenstein.

 

21
Prior period adjustment

The prior year adjustment is in respect of income identified that is contractually in the name of Hal Leonard Europe Limited that had historically been recognised in another group company in error. The associated royalty costs with these contracts have also been reflected in this adjustment. The revenue and costs for the current year are already recognised in these financial statements.

Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Current assets
Debtors due within one year
12,698,034
406,239
13,104,273
Capital and reserves
Profit and loss
11,364,780
406,239
11,771,019
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Turnover
4,831,326
516,998
5,348,324
Cost of sales
(2,921,779)
(110,759)
(3,032,538)
Profit for the financial period
328,967
406,239
735,206
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