Evoke reports 2% revenue decline for H1 2024, driven by UK retail slump, with significant losses due to restructuring costs.
By Gambling Insider
Evoke, which operates brands such as William Hill, 888 and Mr Green, has reported a 2% year-on-year decline in revenue, with revenue totalling £862m ($1.1bn).
This decrease was largely driven by an 8% drop in UK retail revenue, while the UK and Ireland online segment saw a modest 1% increase. International revenue remained flat.
Adjusted EBITDA for H1 2024 was £116m, a 26% decrease. The decline in EBITDA reflects lower revenues and a reduction in gross margins, influenced by changes in the company’s product and country mix.
Evoke also reported a significant post-tax loss of £143.2m, compared to a £32.5m loss in H1 2023. This increase in losses is attributed to £72m in exceptional costs, primarily related to the company’s exit from the US B2C market and ongoing integration and transformation expenses.
Despite these challenges, Evoke reported a cash position of £116m as of 30 June, with total liquidity nearing £300m. The company also highlighted a 12% increase in marketing expenditure, reaching £16m, with a temporarily elevated online marketing ratio of 25%.
Evoke has been undergoing significant strategic and operational changes in 2024, including a rebranding and the implementation of a new strategy aimed at achieving mid and long-term profitable growth. These changes include a reorganisation of the company’s operating model and a complete overhaul of its executive leadership team, actions expected to deliver £30m in cost efficiencies by the end of FY24.
We are completely transforming this business. While the scale of change is significant, it is necessary for us to deliver mid and long-term profitable growth and value creation
Looking ahead, Evoke expects revenue growth of 5-9% for the second half of 2024, with a projected improvement in profitability driven by cost-saving initiatives and enhanced product offerings. The company has maintained its FY25 targets, including an adjusted EBITDA margin of at least 20% and annual revenue growth of 5-9%.
Earlier this year, Evoke revised its FY24 expectations following mixed results in the first quarter. The company also partnered with Mindway AI in July 2024 to integrate AI-driven solutions for player protection.
“Disappointing but underlying health getting stronger”
Per Widerstrom, Evoke CEO, responded to the results as follows:
“As I said in our July trading update, while the financial performance in the first half was disappointing and behind our initial plan, the underlying health of the business is continually getting stronger. The corrective actions we have already taken give us even more confidence that our strategic approach is sound and that we will achieve sustainable success.
“We are completely transforming this business. While the scale of change is significant, it is necessary for us to deliver mid and long-term profitable growth and value creation. We have already taken bold, decisive actions to both instigate a turnaround in short-term trading performance while simultaneously investing into the group’s capabilities to drive step-change value creation and build a bigger, more profitable, more sustainable, and more cash-generative business in the future.
“We have a clear plan, vision and financial targets. As a result of our strategic progress and the enhancements already made to the business, I am even more confident about delivering our value creation plan and driving sustainable profitable growth over the coming years.”