British telecoms giant Vodafone said on Tuesday it had rebounded into annual profit, as it cut debt after the flotation of its European phone mast division.

Profit after tax hit €112 million in the 12 months to the end of March, Vodafone said in a results statement that also revealed plans for more investment.

The group had suffered a net loss of €920 million in 2019/20, when its performance was skewed by a vast legal charge in India.

In 2020/21, Vodafone cut its huge debt pile to €40.5 billion, thanks to the initial public offering of the phone mast unit Vantage Towers.

However, sales dipped 2.6 per cent to €43.8 billion as the coronavirus pandemic slammed demand for global travel and weighed on roaming revenues.

The pandemic has shown how critical connectivity and digital services are to society

Vodafone, meanwhile, vowed to refocus on new generation connectivity and digital services in Europe and Africa, in the wake of the COVID-19 crisis.

“The world has changed. The pandemic has shown how critical connectivity and digital services are to society,” said chief executive Nick Read.

“Vodafone is strongly positioned and through increased investment, we are taking action now to ensure we play a leadership role and capture the opportunities that these changes create.”

The firm’s share price slid 5.8 per cent to 133.44 pence in midday deals on London's rising FTSE 100.

“These are not results to shoot the lights out, but there are signs of measured progress within an extremely competitive sector,” said Interactive Investor analyst Richard Hunter.

Vodafone floated Vantage Towers in Frankfurt in March, valuing the division at around €12 billion.

Vodafone raised €2.3 billion in the IPO, although it remains a majority shareholder.

Vantage Towers’ portfolio includes 82,000 macro sites − towers, masts and rooftops − across 10 European countries.