ii view: Evoke reports progress under reset strategy

First-half results to 30 June

• Revenue up 3% to £888 million 
• Adjusted profit (EBITDA) up 44% to £166 million
• Reported loss of £65 million, improved from a loss of £143 million in H1 2024
• No dividend payment
• Group net debt of £1.82 billion, up from £1.79 billion

Chief executive Per Widerström said: “The improved financial performance is a result of substantial strategic progress, focusing resources on our core markets and executing a short-term turnaround, while investing in building stronger capabilities to support long-term sustainable and profitable growth.

“The acceleration in Q2 performance, together with a strong pipeline of product enhancements and operational efficiency initiatives, underpins our confidence of improved growth in H2.”

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ii round-up:

Evoke (LSE:EVOK) today detailed sales and profit progress with the betting and gaming company on target to achieve both full-year and medium-term financial targets. 

Revenues up 3% to £888 million as well as reduced marketing spend, and the closure of its US consumer business, helped adjusted profits (EBITDA) climb 44% to £166 million. The previous buyer of William Hill continues to expect full-year revenue growth of between 3% to 5%.

Shares for the former 888 Holdings rose 2% in UK trading having come into these latest results up by a similar amount so far during 2025. That’s similar to Paddy Power owner Flutter Entertainment (LSE:FLTR). The FTSE Small Cap index is up almost 5% year-to-date. 

Incorporated in Gibraltar and headquartered in London, Evoke owns and operates UK and overseas brands including William Hill, 888, and Mr Green. 

A statutory first-half loss of £65 million, and hindered by financing costs related to its prior largely debt-funded acquisition of William Hill, is improved from a loss of £143 million a year ago. 

Group net debt of £1.82 billion rose from £1.79 billion, although with the increase in adjusted profits taking the ratio of EBITDA to net debt to 5 times and down from 5.7 times in late December. 

Evoke continues to target a leverage ratio of below 3.5 times by the end of 2027. 

Capital expenditure rose to £49.2 million from £32.9 million a year given ongoing investments in product development and revenue-generative activities. 

A third-quarter trading update is likely in mid to late October. 

ii view:

Began in 1997, Evoke today employs more than 8,000 people. The group highlights its five core markets as the UK, Italy, Spain, Romania and Denmark, which together accounted for almost 90% of revenues during this latest period. The international division generated most adjusted profits during this first half at 49%. That was followed by the UK and Irish online business at 34% and the retail high street business the balance of 17%.  

Evoke’s strategy is now focused on driving profitable and sustainable revenue growth, improving profitability and efficiency, and reducing debt via disciplined capital allocation.  

For investors, group net debt of £1.82 billion compares to a current stock market value of under £300 million. Unexpected sports results squeezing margins remain an ever-present threat. Potentially increased government regulation and taxes across any of its geographical regions warrants consideration, while the lack of a dividend payment contrasts with an estimated future yield of around 2% at Entain (LSE:ENT). 

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More favourably, the prior purchase of William Hill operations has given Evoke a famous brand name as well as expand its exposure to sports betting. A diversity of brands and geographical operations exists. A recovery/growth strategy continues to be pursued, while cost savings of up to £25 million continue to be pursued this financial year. 

In all, known brand names and established UK and overseas market positions offer appeal. That said, elevated net debt and losses cannot be overlooked, with Evoke still an investment for higher-risk investors only.

Positives: 

• Diversity of products and geographical locations
• Possible industry consolidation 

Negatives:

• Potential for increased taxes
• Uncertain economic outlook 

The average rating of stock market analysts:

Buy