Company Registration No. 02523629 (England and Wales)
Sennheiser UK Limited
Annual report and financial statements
for the year ended 31 December 2024
Sennheiser UK Limited
Company information
Director
Daniel Sennheiser
Secretary
Kelly Watts
Company number
02523629
Registered office
Ground Floor, Eclipse
Parkway
Marlow
England
SL7 1YL
Independent auditor
Saffery LLP
St John's Court
Easton Street
High Wycombe
HP11 1JX
Sennheiser UK Limited
Contents
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
Sennheiser UK Limited
Strategic report
For the year ended 31 December 2024
1
The director presents the strategic report for the year ended 31 December 2024.
Fair review of the business
After 4 years of continuous growth, Sennheiser globally fell short of 2023 revenue and 2024 expectations. The global AV market shrank due to many factors including challenging economic conditions generally with inflation and interest rates hitting budgets. Political challenges globally have also hit education budgets and university spending has decreased.
The pandemic in 2020-21 caused lots of issues to companies globally and some companies struggled to get products to market which meant Sennheiser took market share. Our competitors are now trying to regain their market share thus making the industry more competitive.
In the aftermath of the pandemic, companies and universities spent heavily on Audio equipment as the world moved to hybrid working and as demonstrated by sales in 2023 H2 and 2024, companies have not needed to spend on new equipment. However, we expect in the next 2 years these companies and universities will look to replace and improve their audio capabilities. Despite the slowdown, analysts believe the industry is still fundamentally healthy.
Sennheiser UK sales have followed the pattern of global sales generally with many of the advanced economies of the world recording below average or negative growth in 2024 and the emerging markets of India and the Middle East recording impressive growth. Sennheiser UK followed this trend with sales decreasing by 8% and the Middle East increasing sales by 10% respectively.
Business Communications had a tough year with the Team Ceiling Connect products seeing a fall in sales. Pro Audio fared much better with sales a few percent down compare to 2023.
Principal risks and uncertainties
Sennheiser have assessed the principal risks and uncertainties and have highlighted the following risks currently facing the business:
Economic Slowdown – The UK is predicting small growth in 2025. Tough economic conditions could have a negative impact on Sennheiser because of businesses having less money to spend.
Competitors have recovered from not having products in the market in 2022 and the beginning of 2023 and will be looking to regain market share in 2025.
Financial risk management
The company's primary financial instruments are trade debtors, cash at bank and bank overdraft, trade creditors and intercompany balances, which arise directly from its operations.
Credit risk
The company trades only with recognised, creditworthy third parties. It is the company's policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the company's exposure to bad debts is not significant.
Currency risk
The company makes an element of its sales and purchases in foreign currencies. The directors monitor on an ongoing basis the currency risk arising to the company and ensures that risk remains at an acceptable level.
Sennheiser UK Limited
Strategic report (continued)
For the year ended 31 December 2024
2
Development and performance
2024 was a tough year however the company is still profitable and is confident of continued success globally building on the strategic decision to focus on the Pro Audio business. Sennheiser continue to invest in the Professional business and seek new opportunities in the industry. We hope with this investment that Sennheiser can alleviate the risk of the economic slowdown that we see globally.
Sennheiser have new products coming to market in both Professional Audio and Business Communications and are especially excited how Spectera which will be released in 2025 will do with great reviews from industry experts. We proceed with strengthening our powerful position in the global market, with a particular focus on expanding digital services. Neumann, a premium brand for studio quality, will continue to focus on digital workflows. In Business Communications we will focus on increasing the product portfolio in the coming years and the continuous goal to be the market leader in audio solutions for the office, meeting room and lecture hall.
Financial key performance indicators
The primary key performance indicators are sales revenue, gross profit and working capital, measured as net current assets. As set out in the accounts and notes that follow, sales revenue decreased to £37.2m (2023: £38.7m), and gross profit fell to £7.8m (2023: £8.1m). Working capital fell based on net current assets of £2.4m (2023: £3.4m).
Daniel Sennheiser
Director
11 March 2025
Sennheiser UK Limited
Director's report
For the year ended 31 December 2024
3
The director presents his annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company continued to be that of a recognised seller and distributer of microphones, headphones and other electro-acoustic equipment.
Branches
The company has a branch in the United Arab Emirates.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,500,000. 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:
Daniel Sennheiser
Auditor
Saffery LLP have expressed their willingness to continue in office.
Statement of director's responsibilities
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future business developments and financial instrument risk.
Sennheiser UK Limited
Director's report (continued)
For the year ended 31 December 2024
4
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Daniel Sennheiser
Director
11 March 2025
Sennheiser UK Limited
Independent auditor's report
To the member of Sennheiser UK Limited
5
Opinion
We have audited the financial statements of Sennheiser UK Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 Financial Reporting Standard 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:
give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 directors’ 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 directors with respect to going concern are described in the relevant sections of this report.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. 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.
Sennheiser UK Limited
Independent auditor's report (continued)
To the member of Sennheiser UK Limited
6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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 in which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with the director and updating our understanding of the sector in which the company operates.
Sennheiser UK Limited
Independent auditor's report (continued)
To the member of Sennheiser UK Limited
7
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company’s correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Sheryl Davis
Senior Statutory Auditor
for and on behalf of Saffery LLP
12 March 2025
Statutory Auditors
St John's Court
Easton Street
High Wycombe
HP11 1JX
Sennheiser UK Limited
Statement of comprehensive income
For the year ended 31 December 2024
8
2024
2023
Notes
£
£
Turnover
3
37,231,342
38,675,205
Cost of sales
(29,457,723)
(30,500,156)
Gross profit
7,773,619
8,175,049
Distribution costs
(5,125,537)
(5,395,412)
Administrative expenses
(1,866,261)
(1,560,837)
Other operating income
108,051
92,895
Operating profit
4
889,872
1,311,695
Interest receivable and similar income
7
37,288
244,237
Interest payable and similar expenses
8
(111,639)
(79,560)
Profit before taxation
815,521
1,476,372
Tax on profit
9
(213,815)
(376,649)
Profit for the financial year
601,706
1,099,723
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
22,009
(60,694)
Total comprehensive income for the year
623,715
1,039,029
Sennheiser UK Limited
Statement of financial position
As at 31 December 2024
31 December 2024
9
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
514,615
582,758
Current assets
Stocks
13
1,299,540
1,704,352
Debtors
14
5,280,942
5,398,541
Cash at bank and in hand
1,693,506
1,911,797
8,273,988
9,014,690
Creditors: amounts falling due within one year
15
(5,830,653)
(5,653,967)
Net current assets
2,443,335
3,360,723
Total assets less current liabilities
2,957,950
3,943,481
Provisions for liabilities
Provisions
16
286,039
372,975
Deferred tax liability
17
50,123
72,433
(336,162)
(445,408)
Net assets
2,621,788
3,498,073
Capital and reserves
Called up share capital
19
210,000
210,000
Profit and loss reserves
2,411,788
3,288,073
Total equity
2,621,788
3,498,073
The financial statements were approved and signed by the director and authorised for issue on 11 March 2025.
Daniel Sennheiser
Director
Company Registration No. 02523629
Sennheiser UK Limited
Statement of changes in equity
For the year ended 31 December 2024
10
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2023
210,000
7,249,044
7,459,044
Year ended 31 December 2023:
Profit
-
1,099,723
1,099,723
Other comprehensive income:
Currency translation differences
-
(60,694)
(60,694)
Total comprehensive income
-
1,039,029
1,039,029
Dividends
10
-
(5,000,000)
(5,000,000)
Balance at 31 December 2023
210,000
3,288,073
3,498,073
Year ended 31 December 2024:
Profit
-
601,706
601,706
Other comprehensive income:
Currency translation differences
-
22,009
22,009
Total comprehensive income
-
623,715
623,715
Dividends
10
-
(1,500,000)
(1,500,000)
Balance at 31 December 2024
210,000
2,411,788
2,621,788
Sennheiser UK Limited
Statement of cash flows
For the year ended 31 December 2024
11
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,705,334
5,491,870
Interest paid
(111,639)
(79,560)
Income taxes paid
(333,125)
(225,063)
Net cash inflow from operating activities
1,260,570
5,187,247
Investing activities
Purchase of tangible fixed assets
(38,140)
(542,160)
Interest received
37,288
244,237
Net cash used in investing activities
(852)
(297,923)
Financing activities
Dividends paid
(1,500,000)
(5,000,000)
Net cash used in financing activities
(1,500,000)
(5,000,000)
Net decrease in cash and cash equivalents
(240,282)
(110,676)
Cash and cash equivalents at beginning of year
1,911,797
2,081,871
Effect of foreign exchange rates
21,991
(59,398)
Cash and cash equivalents at end of year
1,693,506
1,911,797
Sennheiser UK Limited
Notes to the financial statements
For the year ended 31 December 2024
12
1
Accounting policies
Company information
Sennheiser UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ground Floor, Eclipse, Parkway, Marlow, England, SL7 1YL.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
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.
Customer rebates are calculated as a percentage of the customer's turnover for the year at the agreed rate. Rebates claimed in the year are recognised in profit or loss as they arise. Estimated unclaimed rebates are accrued at the year end and included in creditors.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
1
Accounting policies (continued)
13
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Customer list
Over 5 years
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently 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:
Short-term leasehold property
10% straight line over the lease term
Plant and equipment
20% straight line
Fixtures and fittings
10% - 33% straight line
Computers
20% - 50% straight line
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.
1.6
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
1
Accounting policies (continued)
14
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts, to the extent they exist, are reported within current liabilities.
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 statement of financial position 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, 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
1
Accounting policies (continued)
15
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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, bank loans and loans from fellow group companies 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
1
Accounting policies (continued)
16
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
1
Accounting policies (continued)
17
1.15
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.16
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.
Exchange differences arising from the translation of the results and financial position of overseas branches, from functional currency into presentational currency, are recognised in other comprehensive income.
2
Critical accounting 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Guarantee provision
The guarantee provision is based on the company's assessment of product sales in the year and past knowledge of claims against the guarantee. The value of actual claims arising may vary from that estimated by the company due to production or quality issues.
Stock provision
The company holds significant levels of goods for resale. As a result, it is necessary to consider the recoverability of the cost of stock and the associated provision required. When calculating the stock provision, management consider the nature and condition of stock held, and apply assumptions around the anticipated saleability of these goods. See note 13 for the net carrying amount of stock and the value of the associated provision.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
18
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
36,981,555
38,499,381
Sale of services
249,787
175,824
37,231,342
38,675,205
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
25,043,631
27,573,309
Rest of Europe
1,158,444
1,094,690
Rest of the World
11,029,267
10,007,206
37,231,342
38,675,205
2024
2023
£
£
Other significant revenue
Interest income
37,288
244,237
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
42,824
(4,133)
Depreciation of owned tangible fixed assets
106,301
134,640
Operating lease charges
555,058
449,324
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
30,400
26,523
For other services
Taxation compliance services
2,200
2,000
All other non-audit services
7,250
6,850
9,450
8,850
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
19
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Selling and distribution
40
34
Administration
18
21
Total
58
55
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,634,868
3,626,575
Social security costs
386,985
348,085
Pension costs
432,052
401,123
4,453,905
4,375,783
7
Interest receivable and similar income
2024
2023
£
£
Interest receivable from group companies
37,288
244,237
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
111,639
79,795
Other finance costs:
Other interest
(235)
111,639
79,560
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
20
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
236,000
333,000
Adjustments in respect of prior periods
125
(15,937)
Total current tax
236,125
317,063
Deferred tax
Origination and reversal of timing differences
(22,310)
59,586
Total tax charge
213,815
376,649
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:
2024
2023
£
£
Profit before taxation
815,521
1,476,372
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
203,880
347,243
Tax effect of expenses that are not deductible in determining taxable profit
10,017
34,379
Permanent capital allowances in excess of depreciation
(207)
(196)
Depreciation on assets not qualifying for tax allowances
11,160
Under/(over) provided in prior years
125
(15,937)
Taxation charge for the year
213,815
376,649
10
Dividends
2024
2023
£
£
Interim paid
1,500,000
5,000,000
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
21
11
Intangible fixed assets
Customer list
£
Cost
At 1 January 2024 and 31 December 2024
260,632
Amortisation and impairment
At 1 January 2024 and 31 December 2024
260,632
Carrying amount
At 31 December 2024
At 31 December 2023
Intangible fixed assets comprise the acquired assets, goodwill, know-how and customer list of Professional Audio Limited, a company incorporated in Ireland.
12
Tangible fixed assets
Short-term leasehold property
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
At 1 January 2024
29,777
26,639
518,216
258,890
833,522
Additions
12,031
26,109
38,140
Disposals
(93,000)
(93,000)
Exchange adjustments
1,425
102
1,527
At 31 December 2024
29,777
26,639
531,672
192,101
780,189
At 1 January 2024
29,777
7,992
10,018
202,977
250,764
Depreciation charged in the year
5,328
65,917
35,056
106,301
Eliminated in respect of disposals
(93,000)
(93,000)
Exchange adjustments
1,411
98
1,509
At 31 December 2024
29,777
13,320
77,346
145,131
265,574
Carrying amount
At 31 December 2024
13,319
454,326
46,970
514,615
At 31 December 2023
18,647
508,198
55,913
582,758
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,299,540
1,704,352
Stocks are stated net after provisions for impairment of £152,365 (2023 - £136,829).
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
22
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,987,107
5,217,375
Corporation tax recoverable
64,000
Prepayments and accrued income
229,835
181,166
5,280,942
5,398,541
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
190,213
238,993
Amounts owed to group undertakings
2,997,240
2,478,677
Corporation tax
33,000
Other taxation and social security
803,961
1,133,960
Accruals and deferred income
1,839,239
1,769,337
5,830,653
5,653,967
The company's bank overdraft is secured by a debenture dated 16 September 2011 on the assets of the company.
16
Provisions for liabilities
2024
2023
£
£
Guarantees
81,026
372,975
Dilapidations
205,013
-
286,039
372,975
Movements on provisions:
Guarantees
Dilapidations
Total
£
£
£
At 1 January 2024
372,975
-
372,975
Additional provisions in the year
-
205,013
205,013
Reversal of provision
(291,949)
-
(291,949)
At 31 December 2024
81,026
205,013
286,039
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
16
Provisions for liabilities (continued)
23
The guarantees provision is in respect of claims made under guarantee for product sales in the current financial year and in preceding reporting periods. Costs are expected to be incurred throughout the forthcoming 12 months and beyond. The timing of costs being incurred is dependent upon the timing of claims.
The dilapidations provision is in respect of the present value of the estimated obligation arising to make good the premises occupied by the company as lessee.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
59,345
72,433
Short term timing differences
(9,222)
-
50,123
72,433
2024
Movements in the year:
£
Liability at 1 January 2024
72,433
Credit to profit or loss
(22,310)
Liability at 31 December 2024
50,123
The net deferred tax liability and asset expected to reverse within 12 months of the year end is £12,600 and relates to timing differences on fixed assets capital allowances and short term timing differences that are expected to unwind within the same period.
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
432,052
401,123
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.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
24
19
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
210,000 Ordinary shares of £1 each
210,000
210,000
Each share entitles the holder to equal voting rights, distribution rights and the right to participate in a distribution arising from winding up of the company.
20
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:
2024
2023
£
£
Within one year
98,255
54,512
Between two and five years
444,733
527,384
542,988
581,896
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
170,970
160,221
Transactions with related parties
The company has taken advantage of the exemption conferred by FRS 102 from disclosing related party transactions with other companies that are wholly owned within the group.
22
Ultimate controlling party
The company is a wholly owned subsidiary of Sennheiser Global Operations Gmbh Co. KG, a company incorporated in Germany.
The parent of the largest and smallest group of undertakings for which group accounts are drawn up is Sennheiser Electronic Gmbh & Co. KG, a company incorporated in Germany. Copies of these consolidated accounts may be obtained from Am Labor 1, 30900 Wedemark, Germany.
The company is ultimately controlled by the Sennheiser family.
Sennheiser UK Limited
Notes to the financial statements (continued)
For the year ended 31 December 2024
25
23
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
601,706
1,099,723
Adjustments for:
Taxation charged
213,815
376,649
Finance costs
111,639
79,560
Investment income
(37,288)
(244,237)
Depreciation and impairment of tangible fixed assets
106,301
134,640
Decrease in provisions
(86,936)
(248,000)
Movements in working capital:
Decrease/(increase) in stocks
404,812
(556,161)
Decrease in debtors
181,599
1,793,210
Increase in creditors
209,686
3,056,486
Cash generated from operations
1,705,334
5,491,870
24
Analysis of changes in net funds
1 January 2024
Cash flows
Exchange rate movements
31 December 2024
£
£
£
£
Cash at bank and in hand
1,911,797
(240,282)
21,991
1,693,506
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