Five things we learned from evoke’s full-year 2024 earnings

A 3% uptick in full-year 2024 revenue saw evoke return to growth for the first time in three years, with revenue hitting £1.8bn for the London-listed company.

But while the days of decline were arrested in 2024, the market sent the William Hill and 888 parent company’s shares slipping some 19% on the day. That is despite H2 revenue alone rising 8% and adjusted EBITDA coming in ahead of guidance.

Flat UK and Ireland growth was as a result of retail declines offsetting a 5.3% jump in online revenue. There was growth across evoke’s other core markets in the shape of Italy, Spain, Denmark and Romania, however.

Further cost savings have also been identified, as CEO Per Widerström continues to push ahead with his value creation plan. The business is still targeting 5% to 9% revenue growth for full-year 2025, but the period got off to a slow start in Q1 for a myriad of reasons.

Here, EGR unpicks the analyst call following evoke’s earnings release, with commentary from both Widerström and CFO Sean Wilkins on the company’s performance and what the next 12 months will hold.

It’s a results business

Like its UK-facing compatriots, evoke was the beneficiary of a host of operator-friendly sports results in Q4 which helped drive up margin. Sports net win margin was up 1.1 percentage points year on year (YoY), although revenue for sports betting was down 1.3% and stakes slumped 11.5%. The stakes decrease was attributed to the shift to a more recreational consumer base, while a smaller recycling of winnings among punters meant revenue was clipped. However, the margin performance sustainability was questioned by some analysts, given the outlier effect of the results.

In response, Wilkins said: “We did see good sports results in Q4 but you’ll also remember that we had the opposite effect in Q3, particularly in September, when we had some pretty dreadful results that had quite a fundamental impact on the business.

“So, I would argue reasonably strongly that sporting results didn’t impact our H2 on the aggregate. I think the growth that we’ve driven in H2 is sustainable and it is product-led as well, which is absolutely crucial.”

Widerström added: “We are addressing some underlying fundamentals when it comes to the composition of the expected margin over time. Number one was in terms of balancing the customer mix. We stepped up in 2024 and will continue to do so when it comes to a great product offering towards multiples [and bet builders].

“Finally, but not least, is that we have stepped up the leadership when it comes to the way we trade and the way we manage the sportsbook. By further improving sportsbook trading and risk management capabilities, we foresee that to have a good continued effect.”

Sales off

Having trimmed the fat in recent years, including the sale of its Latvia-facing business to Paf and its US B2C assets to Hard Rock Digital, evoke is planning on sticking with its current portfolio, according to Wilkins.

When asked if there was any chance the business could look to cut costs further, given a £30m cost-saving programme was implemented last year, the finance chief said that any deal would have to be of a remarkable nature to move the needle. Instead, evoke has identified a further £15m to £25m of cuts to be put in place this year as a further step in the group’s value creation plan.

On selling assets, Wilkins noted: “One of the features of the 2024 cash flow was that we delayed the sale of the B2C assets in the US. So, we’re expecting that to happen sometime over the course of 2025.

“We always look at our optimise assets for potential value-added sales, but we’re certainly not actively looking for buyers of assets at the moment. It’s definitely opportunistic and it needs to be a fabulous return for us.”

Baked in

While bosses are still expecting full-year 2025 revenue growth of between 5% and 9%, Q1 has gotten off to a slower start.

Management said the first three months of the year are likely to be low-single-digit growth compared to Q1 2024, citing several factors.

Those include operator-friendly sports results in Q4, the fact 2024 was a leap year as well as heaving promo spend last year. Also mentioned was the implementation of further safer gambling measures in the UK in 2024. Evoke said this would have a “short-term impact” but in Q2 this would be mitigated due to “improved product and customer experience”.

And with £5 online slots stake limits due to come in from April for over 25s and then the £2 limit for younger players from May, Wilkins was asked what further impact this could have for the business. The CFO replied that evoke had already baked in these changes and so is expecting little or no impact.

He said: “The additional safer gambling measures we introduced in Q4 and through Q1 are basically part of the way we do business.

“We’re continually looking at our player safety and we look at it through the customer life-cycle management lens. [The guidance] doesn’t include the change to slot limits. But it would be fair to say that, some time ago, we adopted the limits that were expected to be implemented. We don’t really expect any impact on the business from that.”

Debt details

Also detailed in the earnings report was the group’s aim to have its debt leverage below 3.5x being kicked from 2026 to 2027. As of 31 December 2023, leverage sat at 5.9x, and has since fallen to 5.7x as of the end of 2024. Management is expecting that to fall below 5x by the end of 2025.

The reason for pushing the target through to 2027 was given as a need to “build out world-class capabilities, alongside the further exceptional costs and capex required to execute such a significant transformation in the business”.

Wilkins lifted the lid further on this point from the report in the call, stating: “We’ve moved our capex up from £100m to £110m. We’re investing in our retail estate, we’re investing in AI and other strategic initiatives and we’re investing in product in the online business. So, those things are driving capex up.

“And then there’s additional exceptionals. We announced that we are aiming at £15m to £25m in cost efficiencies over the year. That additional capex and additional exceptionals are pushing out our targets.

“We are on a very strong deleveragingtrajectory. I expect leverage to be under 5x by the end of 2025. We’ve also said under 3.5x by the end of 2027.”

Not sitting still

The final question on the call came from a shareholder, questioning the decline in the group’s share price and how shareholder value will be derived from the value creation plan. Widerström stated that being a shareholder in the business himself, he was committed to turning around its fortunes, pointing to the return in growth witnessed in 2024 as the first step. The Swede said he was “living and breathing” the value creation plan to deliver “substantial shareholder value”.

Evoke’s shares tumbled 19% yesterday and have slipped a further 10.8% in trading today to 51.25p. The stock is down more than 40% over the past 12 months.

Widerström concluded: “If we look at the transformation that we are undergoing in the short-term trading turnaround, we can see that we are back to three quarters of consecutive growth. The strategy is indeed working. 2024 was indeed a transformational year.

“We are making great progress. The way we are stepping up the customer life-cycle management, the way we are stepping up product and tech [show that]. The question is, is this sustainable profit growth? Absolutely it is. And that is why we’re absolutely adamant to deliver the value creation plan.”