Legend Internet’s FY2026 profit falls 91% as N672 million asset-gain masks operating loss

Legend Internet Plc reported a pre-tax profit of N13.21 million for the 12 months ended July 31, 2026, down 92.35% from N172.66 million in the prior year, largely driven by nearly nine-fold growth in administrative expenses and a more than tenfold surge in finance costs.

According to the company’s financial results filed on the Nigerian Exchange (NGX) on Tuesday, September 15, 2026, profit for the period fell 90.73% year-on-year to N13.21 million from N142.46 million, even as the top line came under pressure across the review period.

A one-off N672 million gain on asset disposal provided support, offsetting what could have been a significant operating loss in the financial performance of the broadband and digital services provider.

Key highlights (12 months ended July 2026 vs 12 months ended July 2025):

• Revenue: N1.10 billion, down -7.44% YoY
• Gross profit: N714.00 million, down -6.23% YoY
• Profit before tax: N13.21 million, down -92.35% YoY
• Total assets: N4.14 billion, up +28.94% YoY
• Total equity: N2.76 billion, down -2.73% YoY
• Earnings per share: 1 kobo, down from 7 kobo
• Borrowings: N1.14 billion, up +1,419.10% YoY
• Cash and cash equivalents: N6.09 million, down -71.02% YoY

Driving the numbers:

An analysis of Legend Internet’s FY2026 performance reveals that the sharp decline in profitability was driven by the convergence of three pressure points: a shrinking core revenue base, a near-doubling of administrative overhead, and a dramatic escalation in financing costs — offset only by a large non-recurring gain.

• Revenue declined 7.44% to N1.10 billion from N1.19 billion, with the company’s dominant Legend Fibre segment weakening to N930.20 million from N1.12 billion, a fall of about 17.3%.
• Cost of sales fell faster, down 9.59% to N388.46 million, lifting gross margin to 64.76% from 63.93%.
• Administrative expenses surged 88.87% to N1.06 billion from N560.18 million, with professional fees alone jumping to N355.31 million from just N4.30 million a year earlier, indicating the bulk of the expense growth.
• The resulting operating loss before other income widened to N344.05 million, a reversal from an operating profit of N201.24 million in FY2025.
• Finance costs compounded the pressure, rising 1,001.15% to N314.74 million from N28.58 million, linked to a N1.12 billion bridge facility outstanding at July 31, 2026, carrying a 35% annual interest rate and maturing in December 2026.

Without the N672 million gain on disposal of assets recorded as other income, the company would have posted a substantial pre-tax loss rather than a marginal profit.

Balance sheet and liquidity:

Total assets rose 28.94% to N4.14 billion, driven largely by higher receivables, prepayments and other current assets, while total liabilities held roughly flat at N371.48 million.

• Total equity, however, slipped 2.73% to N2.76 billion, and retained earnings fell 11.06% to N623.29 million.
• Cash and cash equivalents fell 71.02% to N6.09 million from N21.02 million, while operating cash flow remained deeply negative at N1.14 billion outflow, worse than the N72.64 million outflow recorded in the prior year.
• Borrowings ballooned to N1.14 billion from N75.23 million, a rise of more than 1,400%, almost entirely accounted for by the bridge facility.

On a brighter note, wholesale bandwidth revenue surged 331.4% to N162.58 million from N37.68 million, and CPE sales grew roughly 402% to N7.20 million from N1.44 million, improving the revenue mix.

Shareholding structure changes:

The filing shows a marked shift in ownership between May 19, 2025, and July 31, 2026, with issued share capital unchanged at 2 billion shares.

• Bruce Ayonote’s stake fell to 492.64 million shares (24.63%) from 686.21 million (34.31%), while Suleiman Arzika’s holding dropped to 380.04 million shares (19.00%) from 645.20 million (32.26%).
• Legacy Guardian LLP’s stake also declined, to 58.60 million shares (2.93%) from 112.50 million (5.62%), while Synergy Fiberco (Mauritius) Ltd’s 500 million shares (25%) stake was unchanged.
• Combined, total substantial shareholdings fell from 97.20% to 71.56%, while free float rose sharply from 1.31% to 27.24% — an increase of roughly 518.55 million shares.

The company disclosed that it is now compliant with the Exchange’s Main Board free-float requirement as a result.

Market reaction:

Legend Internet (LEGENDINT) closed its last trading day, Tuesday, September 15, 2026, at N4.05 per share, up 1.2% from the previous close of N4.00.

The stock began the year at N5.29 and has since lost 23.4% of its value, ranking it 113th on the NGX by year-to-date performance.

Shares have fallen from a year-high of N7.98 on March 6, 2026, to Tuesday’s close of N4.05, and have shed a further 7% since August 17.

Investors will likely be watching closely to see whether management can rein in administrative costs and refinance the high-interest bridge facility before its December 2026 maturity, particularly given how thin the cash buffer has become relative to the scale of outstanding borrowings.