Legend Internet Plc boosted annual profit by 45 per cent as lower network costs and new revenue streams lifted margins, though rising expenses and weak cash generation signal financial pressures facing the Abuja-based broadband provider.
The company posted a net profit of ₦172.7 million for the year ended July 31, 2025, compared with ₦119.5 million a year earlier, according to its unaudited financial statements. Revenue rose 4.6 per cent to ₦1.19 billion, with growth driven by wholesale bandwidth sales and uptake of its digital payments platform, Legend Pay.
A sharp reduction in infrastructure charges helped earnings. Cost of sales fell seven per cent to ₦429.6 million after the firm cut its payments to Infraco Abuja to ₦275.5 million from ₦400 million. Bandwidth costs of ₦125.6 million, booked for the first time, offset some of those savings.
Gross profit climbed 12 per cent to ₦761.4 million, but administrative expenses surged 52 per cent to ₦560.2 million on higher staff salaries, marketing, and consultancy fees. Personnel costs more than doubled to ₦195.9 million, reflecting an expansion in headcount and wage inflation.
Despite cost pressures, operating profit before finance charges was ₦201.2 million, down from ₦309.8 million a year earlier. Profit after tax still rose because the company booked no tax expense this year, compared with a ₦165.6 million charge in 2024.
Cash squeeze mounts
Legend Internet’s biggest challenge lies in liquidity. Operating cash flow swung to a ₦72.6 million deficit from a ₦734.5 million surplus in 2024, as trade receivables ballooned almost 77-fold to ₦367.1 million due to heavy advance payments to vendors. Cash at hand rose to ₦21 million but only after the firm tapped ₦148.8 million in new loans, leaving it with a net overdraft position.
Capital expenditure slowed sharply to ₦29 million from ₦699 million last year, as the company completed much of its fiber backbone rollout. Property and equipment holdings fell to ₦2.6 billion from ₦2.7 billion.
Total assets expanded 10 per cent to ₦3.34 billion, driven by receivables and inventory buildup. Equity strengthened to ₦2.87 billion, with retained earnings up 31 per cent at ₦734.6 million. Shareholders’ funds were bolstered by an earlier recapitalisation in 2024.
Legend’s borrowings jumped nearly tenfold to ₦165.4 million, reflecting reliance on short-term loans and overdrafts. Current liabilities more than doubled to ₦465 million, raising refinancing risks.
The company continues to diversify revenue through Legend Pay and wholesale bandwidth, which together contributed about 3.6 per cent of turnover. Core fiber services still account for over 94 per cent of sales, signaling dependence on infrastructure-driven income.
While profitability improved, the surge in receivables and debt-financed liquidity highlights execution risks. Sustained investment in marketing and network expansion could widen losses if revenue growth fails to accelerate.
Legend’s stock, currently priced at ₦5.65 per share, has edged up by 4.63 per cent from ₦5.40 it closed on Tuesday. The stock hit a ₦10 share price on May 7 before dropping to its current value.
Legend Internet closed its IPO day (April 24, 2025) with a share price of ₦6.20 but has since lost 8.87 per cent off that price valuation, ranking it 136th on the NGX in terms of year-to-date performance.
Shareholders’ worries are compounded by the fact that the stock has lost 13 per cent of the stock’s value from July 30th to date.
BusinessDay