Legend Internet Plc boosted annual profit by 45 percent 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 N172.7 million for the year ended July 31, 2025, compared with N119.5 million a year earlier, according to its unaudited financial statements. Revenue rose 4.6 percent to N1.19 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 7 percent to N429.6 million after the firm cut its payments to Infraco Abuja to N275.5 million from N400 million. Bandwidth costs of N125.6 million, booked for the first time, offset some of those savings.
Gross profit climbed 12 percent to N761.4 million, but administrative expenses surged 52 percent to N560.2 million on higher staff salaries, marketing, and consultancy fees. Personnel costs more than doubled to N195.9 million, reflecting an expansion in headcount and wage inflation.
Despite cost pressures, operating profit before finance charges was N201.2 million, down from N309.8 million a year earlier. Profit after tax still rose because the company booked no tax expense this year, compared with a N165.6 million charge in 2024.
Cash squeeze mounts
Legend Internet’s biggest challenge lies in liquidity. Operating cash flow swung to a N72.6 million deficit from a N734.5 million surplus in 2024, as trade receivables ballooned almost 77-fold to N367.1 million due to heavy advance payments to vendors. Cash at hand rose to N21 million but only after the firm tapped N148.8 million in new loans, leaving it with a net overdraft position.
Capital expenditure slowed sharply to N29 million from N699 million last year, as the company completed much of its fiber backbone rollout. Property and equipment holdings fell to N2.6 billion from N2.7 billion.
Read also: Legend Internet debuts Nigeria’s first fibre-to-the-room service
Balance sheet holds firm but borrowings surge
Total assets expanded 10 percent to N3.34 billion, driven by receivables and inventory buildup. Equity strengthened to N2.87 billion, with retained earnings up 31 percent at N734.6 million. Shareholders’ funds were bolstered by an earlier recapitalisation in 2024.
Legend’s borrowings jumped nearly tenfold to N165.4 million, reflecting reliance on short-term loans and overdrafts. Current liabilities more than doubled to N465 million, raising refinancing risks.
The company continues to diversify revenue through Legend Pay and wholesale bandwidth, which together contributed about 3.6 percent of turnover. Core fiber services still account for over 94 percent 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 N5.65 per share, has edged up by 4.63 percent from N5.40 it closed on Tuesday. The stock hit a N10 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 N6.20 but has since lost 8.87 percent 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 percent of the stock’s value from July 30th to date.
