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Finance
The increased interest charge includes the year's servicing costs
ofvarious acquisitions in the current year anil the previous year'
Primarily , however , the increase is due to additional working
capital requireil throughout the world for growth and to meet
inflation.
European Expansion
The recent EEC negotiations have thrown a fresh emphasis
upon Europe. Since business commentators everywhere are
postulatini the effect upon our industry and commerce if Britain
Lnters the Common Market, it is perhaps appropriate to
re-state EMI's Position.
EMI is, of course, already in Europe - in all countries outside
the Easternbloc - anil it has leil the records market in most of
them for many years. As a Group we continue to believe that the
future lies in uorld markets for all our products and, in Europe
as in the rest ofthe worlil, we will strive to strengthen our
position.
We support Britain's entry. Like other leading organisations in
Britain we are convinced ofthe great opportunities that
membership ofthe EEC will provide.
We have made two important investments this year, as part of
that policy. In January we bought Fona Radio A/S , Denmark's
largeit retailer ofrecords, raclio, television and allied
equipment, for €1.4 million. In March, the Group invested just
ovei33 rnillion for a 50o/o interest in Voxson SpA, a leading
manufacturer oftelevision sets and other domestic electronics
products , including those in the rapidly growing market for
8-track stereo equipment. Voxson, a post-war company, is
tvpical of many of Europe's younger, d5mamic organisations.
Ii iras skitls. energv and a 6ne record ofdevelopmenl' and
proiluction. Now it has the backing and resources ofthe EMI
Group, enabling it to build up a larger distribution for its
products in Europe and els.ewhere.
Toilay, of course, the prospects in the twin worlds of
communication and entertainment are further stimulated by the
infuoduction ofthe audio-visual cassette. Your Group is placed in
an unrivalled position to take advantage ofthose systems which
become commercially successful, as eventually they must. Our
extensive repertoire ofrecords, films and television programrnes
will be made available in a1l countries, and we already have two
organisations in the instructional and entertainment markets -
EMI Special Films Unit and the recently formed RM EMI Visual
Prograrnmes Limited.
Future Prospeets
In the coming year we look for an increase in business activity
here in the UK.
EMIis in a position to benefit from any improvement in all markets
ofthe world, but much depends in the year aheail on a return of
confidence in both the UK anil American economies. Further, we
do not underestimate the serious difrculties facing the capital
goods industries in this country and in the rest ofthe world.
Capitol's recovery is vital to the Group's overall results for the
coming year. Its new management group has made an outstanding
start which encourages us to hope that, subject to there being no
further deterioration in general business conditions in the USA,
Capitol will not trade at a loss in the cuBent year.
We have the people to exploit our worldwitle resources to the full,
and once again our thanks are due to all of them, management
and employees alile, for their efforts in what has been, by any
standards, a difficult year,
Changing World
Few ofus are not affectetl by the other changes that are going
on around us today. Modem communications, in which EMI
has played a pioneering role, have shrunk the world in which
we started business seventy years ago' Tastes and standards in
public entertainment have changed considerably and, tbrough
improved communications, are reflected rapidly throughout
the wor1d.
The market for entertainment, too, is transcending national
frontiers more and rnore. The Gloup anal its artists can no
longer regard Britai.n, the United States or even, for that
matter, the continents of Europe or North Amedca as the only
sources for their audience.
This is why there is nothing more important to the Group than
the promotion of its talent throughout the world, through all
4 the media at its disposal.
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