Evoke Reports Stable Q2 2024 Revenue Amid Strategic Shifts and Challenges
Evoke reported a revenue of £431 million in Q2 2024, showing stability both sequentially and compared to the same period last year. Despite this stability, the company acknowledged that it is “behind plan,” having anticipated a return to year-on-year revenue growth starting from Q2 2024.
UK Online and Retail Performance
In the UK online segment, Evoke saw a 3% revenue increase to £174 million, driven primarily by a 6% growth in gaming. This growth was offset by weaker sports performance, attributed to lingering marketing impacts from 2023.
In response, Evoke has implemented changes in leadership and commercial strategy, with early positive results from a new price and promotions approach.
Conversely, UK retail revenue fell by 8% year-on-year to £128 million, following a particularly strong comparative period. To address this decline, Evoke has plans for new leadership, updated gaming machines, and enhanced product offerings.
International Revenue and Strategic Shifts
International revenue rose by 2% to £129 million, with significant growth observed in Italy, Spain, and Denmark, which now account for approximately 60% of the division’s revenue.
This international growth was partly offset by a strategic shift towards profitability in other markets, including the decision to exit the US B2C business.
Financial Adjustments and EBITDA
Evoke’s adjusted EBITDA margin for the first half of the year is expected to be approximately 13-14%. This figure places the company £35 million to £40 million behind its previously stated EBITDA target, primarily due to cost phasing, heavy marketing expenditure in the first half, lower than expected revenue, and the timing of cost-saving actions.
Despite these challenges, Evoke reported “significant progress” in enhancing its capabilities and competitive advantage during the first six months of the year.
The company completed a rebrand from 888 to Evoke and reorganized its operating model to streamline decision-making and improve efficiency.
Strategic Changes and Leadership
A data-driven approach to customer segmentation and personalized promotions has been adopted, alongside significant leadership changes, with nine out of 11 executive roles being new since October 2023. Additionally, Evoke has refined its product pipeline, with successful launches such as its new betbuilder product for the Euros.
CEO’s Vision for Future Growth
Evoke CEO Per Widerström expressed a commitment to mid and long-term profitable growth and value creation. “We are undertaking a complete reset and transformation of the business,” he said.
“This transformation will take time but will enhance operational efficiency, leading to a bigger, more profitable and more cash generative business in the future.”
Widerström acknowledged the challenges ahead but emphasized the company’s strengthened position and the soundness of its strategic approach. Despite the first-half financial shortfall, he remains confident in achieving profitable growth in H2 2024, targeting a 5%-9% growth rate in line with medium-term guidance.
Future Projections and Market Reaction
Cost optimization is expected to deliver planned savings of £30 million, with a significant portion anticipated in the second half.
The H2 2024 adjusted EBITDA margin is projected to reach approximately 21%. Expectations for FY25 remain unchanged, with at least a 20% adjusted EBITDA margin and sustained annual revenue growth of 5-9%.
