Evoke, a prominent player in the online gaming and betting sector, has recently released its trading update for the first half of 2024. The report reveals a nuanced performance across various segments, impacting the company’s fiscal year expectations.
Financial Performance Overview
Evoke’s revenue for the second quarter of 2024 stood at approximately £431 million ($560 million), marking stable results both sequentially and year-on-year. While the UK online sector experienced a modest 3% revenue increase driven by a robust 6% growth in gaming, challenges in sports betting persisted due to marketing changes and lower returns from Q1 promotions.
Internationally, Evoke achieved a 2% revenue growth (4% in constant currency), buoyed by significant gains in key European markets such as Italy, Spain, and Denmark, which now constitute a substantial portion of the division’s revenue. However, these gains were tempered by reduced revenues in other markets, as Evoke strategically exits the US B2C business to enhance profitability.
In the UK retail sector, revenue remained stable compared to the second half of 2023 but reflected an 8% decline year-on-year, influenced by tough comparatives from the previous year. Evoke’s strategy to address these challenges includes leadership changes and investments in new gaming technologies.
Strategic Initiatives and Transformation
In March 2024, Evoke unveiled a new strategic plan aimed at fostering mid- and long-term profitable growth. This initiative coincided with the company’s rebranding to Evoke in May, signaling a renewed focus on customer value propositions and competitive advantages. Significant progress has been made in restructuring the operating model to improve decision-making efficiency and achieve £30 million in cost efficiencies for FY24.
Evoke’s executive leadership team underwent restructuring, bringing in new talent across diverse industries to bolster strategic capabilities. The company has also made strides in product development, with enhancements to the Mr Green brand and improvements in the William Hill customer value proposition. The successful launch of the Betbuilder product ahead of the Euros underscores Evoke’s commitment to innovation, with further product refinements anticipated in the second half of the year.
Financial Outlook and Expectations
Despite challenges in H1 2024, particularly with adjusted EBITDA expected to be £35-40 million below plan, Evoke remains optimistic about H2 2024. The company anticipates revenue growth aligning with medium-term guidance of 5-9%, supported by robust performance in key markets and enhanced operational efficiencies.
Cost optimization programs are projected to deliver £30 million in savings for the year, with marketing costs set to decrease significantly by £35-40 million in H2, thereby boosting profitability. Evoke expects an adjusted EBITDA margin of around 21% for H2 2024, reinforcing its confidence in achieving at least a 20% margin by FY25, alongside annual revenue growth of 5-9%.
Partnerships and Innovation
In a strategic move to enhance player protection measures, Evoke recently partnered with Mindway AI to integrate AI-driven solutions. This collaboration underscores Evoke’s commitment to responsible gaming practices and aligns with regulatory imperatives across its operational jurisdictions.
Evoke’s trading update for H1 2024 reflects a strategic recalibration aimed at sustainable growth and operational excellence. Despite initial challenges, particularly in sports betting and UK retail sectors, Evoke’s proactive measures in leadership, product innovation, and cost optimization position the company well for future growth. With a robust outlook for H2 2024 and beyond, Evoke remains focused on delivering shareholder value through enhanced profitability and strategic expansion in key markets.