Evoke operates brands such as William Hill, 888, and Mr Green, reporting a 2% decrease in revenue year-over-year, totaling £862 million (1 billion US dollars).
This decline is mainly due to an 8% drop in UK retail revenue, while online business in the UK and Ireland saw a slight increase of 1%. International revenue remained stable.
For the first half of 2024, the adjusted EBITDA was £116 million, a decrease of 26%. The decline in EBITDA reflects the decrease in revenue and gross margin, influenced by changes in the company's product mix and geographic portfolio.
Evoke also reported a substantial post-tax loss of £143.2 million, compared to a loss of £32.5 million in the first half of 2023. The increase in losses is attributed to special costs of £72 million, mainly related to the company's exit from the US B2C market and ongoing integration and transformation expenses.
Despite these challenges, Evoke reported as of June 30, a cash position of £116 million and total working capital close to £300 million. The company also highlighted a 12% increase in marketing expenditures, reaching £16 million, with the online marketing share temporarily rising to 25%.
In 2024, Evoke underwent significant strategic and operational transformations, including brand reshaping and the implementation of a new strategy aimed at medium to long-term profitable growth. These changes involve restructuring the company's operational model and a complete overhaul of its executive leadership team, expected to achieve cost efficiencies of £30 million by the end-end of the fiscal year 2024.
Looking ahead, Evoke expects revenue growth of 5-9% in the second half of 2024, with profitability expected to improve due to cost-saving measures and enhanced product supply. The company maintains its fiscal year 2025 targets, including an adjusted EBITDA profit margin of at least 20% and annual revenue growth of 5-9%.
Earlier this year, Evoke revised its fiscal 2024 expectations after mixed first-quarter results. The company also partnered with Mindway AI in July 2024 to integrate AI-driven player protection solutions.
"Disappointing, but the underlying health is improving,"
Evoke CEO Per Widerstrom responded to the results:
"As I mentioned in the July trading update, while the financial performance for the first half has been disappointing and behind our initial plans, the underlying health of the business continues to strengthen. The corrective actions we have taken give us more confidence that our strategic direction is sound and we will achieve sustainable success.
"We are radically transforming this business. While the scale of change is significant, it is necessary for achieving medium to long-term profitability and value creation. We have taken bold, decisive action to not only turn around short-term trading performance but also invest in the group’s capability to drive step-change value creation, and build a larger, more profitable, more sustainable, and more cash-generative business in the future.
"We have clear plans, vision, and financial goals. Thanks to our strategic progress and business enhancements, I am increasingly confident in our value creation plan and driving sustainable profitability growth in the coming years."
