We remain confident that digital music will return the industry to growth in due course.

Today's results show that EMI Group had a successful first half, delivering significant growth in both revenues and profits, and that both our recorded music and music publishing divisions made good progress during the period,

Now that it is clear that, in the current regulatory environment, a merger with another major music company cannot be pursued at acceptable cost and risk, we will proceed as an independent, music-focused group.

In uncertain market conditions, it remains difficult to predict the outcome for the full year. The final results will depend critically on market trends which have shown some deterioration in the past two months.

While we remain optimistic about the long-term growth opportunities in the sector, we are disappointed that we will not meet our revenue and profitability goals this quarter.

We are forecasting that actual capital expenditure growth will likely come in at or below 10 percent. Therefore, we are cutting numbers for 2001 across the board.