Mobile phone operator mmO2 has disappointed the market with its first set of full-year figures, as investors focused on tough times at its core British business despite a group performance at the upper end of expectations.
Shares in the company, demerged from British Telecom last November, fell eight per cent to 44p - within two pence of its record low.
The company, which owns the rebranded Digifone mobile network in Ireland, is fighting to turn around its German subsidiary in a tough wireless market, but growth has stagnated at its main British business. British revenue rose by just £50 million pounds to £2.756 billion over the year.
Overall, revenue climbed 11.5 per cent to £4.276 billion. Pre-exceptional earnings were £433 million, at the upper end of forecasts ranging from £412 million to £437 million.
Pre-tax loss was £873 million in the 12 months ended March - the first full-year result of mmO2's independence. The figures represent a year's business even though it was under BT for part of the time.
The company said it German subscribers now topped four million, increasing its market share to seven percent and meeting its target of adding a percentage point a year to its share of Europe's largest market over the next five years.
The company has said it would consider selling the German business if it failed to meet its market share targets.
mmO2's results came a day after Vodafone reported a record pre-tax loss and failed to reassure the market about its growth prospects.