Evoke swings to adjusted loss after tax, reiterates guidance
By Josh White
Date: Wednesday 26 Mar 2025
(Sharecast News) - Evoke shares were sliding on Wednesday after it swung to an adjusted loss after tax for 2024, despite second-half adjusted EBITDA surging 71% versus the first half, helping it exceed the top end of its earnings guidance.
The London-listed gambling operator, which counts William Hill among its brands and was formerly known as 888 Holdings, said the second-half improvement followed a period of extensive transformation, with management reaffirming expectations for further growth and margin expansion in 2025.
Full-year adjusted EBITDA rose 4% to £312.5m on revenue of £1.75bn, up 3% year-on-year, marking the company's first return to growth in three years.
The adjusted EBITDA margin for the year reached 17.8%, with second-half margins of 22.1% reflecting operating leverage gains.
Reported EBITDA fell 9% to £230.6m due to £79.3m in exceptional charges, largely tied to the exit from the US B2C business and ongoing integration costs.
On a reported basis, the group posted a loss after tax of £191.4m, compared with a £65.2m loss in 2023, driven by lower EBITDA, higher finance expenses, and a swing to a tax charge.
Adjusted losses after tax came in at £28.8m, versus a profit of £39.3m in the prior year.
The strong second half performance was underpinned by revenue growth in core markets, up 6% at constant currency, with UK and Ireland online returning to growth, up 5% for the full year and 10% in the second half.
International online grew 10% at constant currency, with 25% growth across international core markets.
UK retail declined 5% against strong comparatives, although a sequential improvement was noted in the second half, supported by the rollout of new gaming cabinets, completed in March.
Evoke highlighted the successful execution of its cost optimisation programme, which delivered over £30m in recurring savings, with an additional £15m in savings identified and realised in the second half.
Cash at year-end stood at £147.1m, with total liquidity exceeding £260m.
Leverage declined from 6.7x to 5.7x in the second half, with the group targeting a reduction to below 5.0x by the end of 2025 and below 3.5x by 2027.
Strategic progress included the rebranding to Evoke in May last year, the acquisition of Winner.ro in Romania to establish a fifth core market, and the ongoing repositioning of the William Hill and Mr Green brands.
The group also reported a 6% year-on-year increase in average revenue per user, driven by enhanced data-driven customer segmentation and improved product offerings.
Evoke said it expected first quarter 2025 revenue growth to be in the low single digits, reflecting temporary factors including the impact of new safer gambling measures, racing cancellations, and tough prior-year comparatives.
However, first quarter adjusted EBITDA was expected to rise by £18m ti £28m versus the prior year, with trailing 12-month adjusted EBITDA projected at £330m to £340m.
The board reiterated its full-year guidance for 5% to 9% revenue growth and an adjusted EBITDA margin of at least 20%, with further cost savings of £15m to £25m expected in 2025, more than offsetting anticipated UK cost headwinds.
"2024 was a pivotal year for Evoke as we launched and implemented our new strategy for success, radically transforming almost every area of the business, and moving decisively to create a more sustainable, profitable and cash generative company," said chief executive officer Per Widerström.
"I was delighted to see the results of our transformation start to materialise during the year, with the business returning to revenue growth in the third quarter for the first time in almost three years, in turn delivering a step change in profitability as a result of our increasingly efficient operating model.
"Whilst a transformation of this scale is never easy, I am pleased with the strong progress we made during the year as we built a winning team and delivered a consistently great customer experience."
Widerström said the company was "laser focused" on its core markets of the UK, Italy, Spain, Romania, and Denmark.
"These markets - where we have strong brands and market positions - now represent approximately 90% of our revenue with each boasting attractive long-term growth potential, high barriers to entry, and established regulatory frameworks.
"2025 is shaping up to be another exciting year for Evoke."
While first-quarter revenue growth was expected to be low single digit, Per Widerström said the firm remained highly confident in its full year expectations of 5% to 9% growth in addition to driving further margin expansion as a result of its more efficient operating model.
"Our exciting product pipeline, continued UK retail optimisation programme, and ever-improving capabilities around data and personalisation all reinforce my confidence in making further progress in 2025 as we continue to execute against our plans to create significant shareholder value."
At 0839 GMT, shares in Evoke were down 13.73% at 61.6p.
Reporting by Josh White for Sharecast.com.
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