Legend entered Spectranet merger after revenue slump, result shows

Legend Internet Plc entered its planned merger with broadband provider Spectranet Limited after a difficult financial year marked by falling revenue, rising costs, and a return to losses, according to the company’s latest annual report.

The results provide the clearest picture yet of Legend’s standalone performance before the merger announced in March, a transaction the company says will create a stronger broadband operator capable of expanding its footprint in Nigeria’s increasingly competitive internet market.

Legend reported revenue of ₦220.6 million for the year ended January 31, 2026, down from ₦321.5 million a year earlier. The decline was driven largely by weakness in its core fibre internet business, where revenue fell to ₦198.3 million from ₦318.2 million in the previous year.

The company swung to a loss after tax of ₦99.3 million, reversing a profit of ₦239.9 million recorded a year earlier. Earnings per share also deteriorated, moving from a profit of 12 kobo to a loss of 11 kobo.

While revenue declined, operating expenses surged.

Administrative expenses nearly tripled to ₦457.6 million from ₦166.8 million a year earlier. Personnel costs rose to ₦153.5 million from ₦57.6 million, while professional fees climbed sharply to ₦79.5 million from ₦9.3 million. Marketing, travel, rent and electricity expenses also increased significantly during the period.

The report also showed a substantial increase in borrowings. Total debt obligations rose to ₦564.9 million from ₦75.2 million, largely reflecting commercial paper liabilities of about ₦538 million.

Despite the weaker earnings performance, Legend strengthened its cash position, ending the period with ₦65.5 million in cash and bank balances compared with ₦21 million a year earlier.

Merger with Spectranet

The results come just weeks after Legend disclosed that it would merge with Spectranet Limited, one of Nigeria’s longest-standing internet service providers.

The company told investors that the transaction would combine the businesses and operations of both firms under a unified corporate structure. The deal, which had previously been described as an acquisition, is now being presented as a merger aimed at creating a larger broadband operator with expanded fibre and wireless capabilities.

“The board believes the transaction will create sustainable long-term value for shareholders by strengthening the company’s competitive position, supporting revenue growth, and improving earnings capacity through operational synergies and increased scale,” the company said when announcing the transaction.

The merger traces its roots to approvals secured from the board and shareholders in late 2025, when Legend sought authority to acquire a licensed rival internet service provider and raise up to ₦150 billion through debt and equity to fund acquisitions and expansion.

Spectranet, which launched 4G LTE services in Nigeria and remains a major player in the fixed wireless broadband market, is expected to bring additional scale, infrastructure and market reach to the combined business.

The figures suggest that while Legend has pursued rapid expansion since listing on the Nigerian Exchange in April 2025, the business was already facing mounting pressure from declining revenue, rising operating costs and growing debt before the merger was unveiled.

The proposed combination, subject to regulatory approvals from the Federal Competition and Consumer Protection Commission and the Nigerian Communications Commission, is expected to be completed in the second quarter of 2026. If approved, it could become one of the most significant consolidation moves in Nigeria’s broadband sector in recent years.