LONDON (ShareCast) - (Sharecast News) - Shares in Evoke were sliding on Thursday morning, after the gambling operator revealed mixed results for the first half but maintained a positive outlook in a trading update.
The London-listed firm, formerly known as 888 Holdings, reported second-quarter revenue of £431m, stable both sequentially and year-on-year.

However, online revenue growth in the quarter was below expectations, leading to revised forecasts for the 2024 financial year.

In the UK online segment, gaming revenue grew by 6%, driven by product and promotion improvements, while sports revenue lagged due to lingering effects from 2023 marketing changes and lower-than-anticipated returns from first-quarter marketing efforts.

New leadership and a revised commercial strategy are expected to address those issues, with initial positive traction observed.

Internationally, revenue rose by 2%, or 4% in constant currency, with core markets like Italy, Spain, and Denmark showing double-digit growth.

That was partly offset by decreased revenues from optimised markets as the focus shifted to profitability, including the exit from the US B2C business.

UK retail revenue remained stable compared to the second half of 2023, but was 8% lower year-on-year due to a strong comparative period.

The adjusted EBITDA margin for the first half was projected to be between 13% and 14%, impacted by the timing of marketing costs and lower-than-expected revenue.

Despite the challenges, Evoke noted that it successfully refinanced in May, improving its debt profile and extending the maturity of £400m by two years to 2030.

Strategically, Evoke made significant progress in the half-year, launching a new strategy and value creation plan in March, followed by a name change in May.

The company's focus on mid- and long-term profitable growth includes enhancing operational capabilities through data insights and automation, restructuring the executive leadership team, and refining its brand and product propositions.

Notable developments included the repositioning of the Mr Green brand and the launch of a successful bet builder product for the Euros.

Looking ahead, Evoke said it expected second-half revenue growth to align with its medium-term guidance of 5% to 9%.

The cost optimisation programme was said to be on track to deliver £30m in savings for the full year, weighted towards the second half.

Marketing costs were projected to be £35m to £40m lower in the second half compared to the first, supporting a significant increase in profitability.

The company anticipated a second-half adjusted EBITDA margin of around 21%, with no changes to its 2025 expectations or medium-term targets, which included 5% to 9% annual revenue growth and 100 basis points of adjusted EBITDA margin expansion per year.

Evoke said its liquidity remained strong, with £116m in cash and nearly £300m in total liquidity as of 30 June.

The company said it was committed to its value creation plan, and was targeting leverage below 3.5x by the end of 2026.

"We are focussed on mid and long-term profitable growth and value creation and during the first half we have made bold, decisive changes to improve almost every area of the business," said chief executive officer Per Widerström.

"We are undertaking a complete reset and transformation of the business, and the scale of change is significant, but necessary.

"This transformation will take time but will enhance operational efficiency, leading to a bigger, more profitable and more cash generative business in the future."

At 0950 BST, shares in Evoke were down 9.08% at 78.5p.

Reporting by Josh White for Sharecast.com.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE