Evoke has released its trading update for the first half of 2024, reporting mixed results that have led to revised expectations for the fiscal year.
For the second quarter of 2024, Evoke reported revenues of approximately £431m ($560m), remaining stable both sequentially and year-on-year. The UK online sector saw a 3% revenue increase, driven by a 6% growth in gaming due to product and promotional improvements.
However, sports betting faced challenges from marketing and proposition changes in 2023 and lower-than-expected returns from Q1 promotional activities. Adjustments in leadership and commercial strategies, including a new pricing and promotions approach, have begun showing positive early results.
Internationally, Evoke’s revenue grew by 2% (4% in constant currency), with significant growth in key markets like Italy, Spain and Denmark, which now comprise about 60% of the division’s revenue.
Reduced revenues from other markets, as the company focuses on profitability and exits the US B2C business, offset these gains.
In the UK retail sector, revenue remained stable in H1 2024 compared to H2 2023 but was 8% lower than in 2023, influenced by a strong comparative period. Plans to address performance include leadership changes and the rollout of new gaming machines and improved sports betting technology.
Evoke’s adjusted EBITDA margin for H1 2024 is expected to be around 13-14%, influenced by marketing costs heavily weighted towards the first half and lower-than-expected revenue.
Evoke launched a new strategy and value creation plan in March 2024, officially changing its name to Evoke in May. This strategy focuses on mid- and long-term profitable growth by investing in the group’s capabilities and transforming the business around a clear customer value proposition and competitive advantages.
Significant progress was made in H1 2024, including the reorganisation of the operating model to streamline decision-making and enhance effectiveness. This reorganisation aims to deliver the previously announced £30m in cost efficiencies for FY24. The company has also completed a restructuring of its executive leadership team, bringing in new talent from various industries.
Product development has seen advancements, with the repositioning of the Mr Green brand and refinements to the William Hill customer value proposition. The launch of a new Betbuilder product ahead of the Euros has shown success, with further product improvements expected in the second half of the year.
Evoke expects H1 2024 adjusted EBITDA to be approximately £35-40m behind the plan, impacting FY24 expectations. However, the company maintains a positive outlook for H2 2024, with revenue growth anticipated to align with the medium-term guidance of 5-9%.
Cost optimisation programs are expected to deliver £30m in savings for the year, with incremental benefits in H2. Marketing costs, planned to be higher in H1, are expected to be £35-40m lower in H2, contributing to a significant increase in profitability.
The adjusted EBITDA margin for H2 2024 is expected to be around 21%. Evoke has reiterated its FY25 expectations and medium-term targets, including at least a 20% adjusted EBITDA margin and annual revenue growth of 5-9%.
Earlier this month, Evoke partnered with Mindway AI to integrate AI-driven solutions for player protection.
