LONDON -- Commenting on the results, Mike Parton, Chief Executive, said 'The results forthe first six months of the year demonstrate clearly that the aggressive costreduction actions undertaken, together with our focus on cash generation anddebt reduction, are beginning to flow through. This has been achieved despitefurther deterioration in the telecoms equipment and services market world-wide.Furthermore, our continued commitment to customer service has been rewarded byour customers' ongoing support.

'The improvements in our operational performance, together with the commitmentof our creditors to our financial restructuring and the appointment of our newBoard announced today, illustrate the progress that has been made in buildingsolid foundations for the business.'

Highlights:

Solid progress on cost reduction and cash generation initiatives despite continuing tough market conditions

Further aggressive management of cost base

Financial Restructuring progressed to next phase

Marconi plc