evoke Plc Announces H1 2024 Trading Update and Strategic Transformation Plan

Financial Highlights (Unaudited):

• Q2 2024 Revenue: Approximately £431 million, broadly stable both sequentially and year-over-year.
• UK Online: Revenue increased by 3%, with a 6% growth in gaming driven by product and promotional improvements. Sports revenue was impacted by continued effects of marketing and proposition changes in 2023, and lower-than-expected returns from Q1 marketing. Adjustments in leadership and commercial strategy have shown early positive results.
• International: Revenue up 2% (+4% in constant currency), with double-digit growth in Italy, Spain, and Denmark, which now represent around 60% of the division. Reduced revenues from optimized markets as focus shifts to profitability and cash generation, including exiting the US B2C business.
• UK Retail: Revenue stable compared to H2 2023 but 8% lower than 2023. Future plans include leadership changes and the rollout of new gaming machines starting Q4 2024, along with improvements in SSBT products and sports broadcast offerings.
• Adjusted EBITDA Margin: Expected to be approximately 13-14% for H1, influenced by heavy marketing costs in the first half and lower revenue.
• Refinancing: Successful refinancing in May 2024 extended the maturity of £400 million by two years to 2030, improved the fixed/floating debt mix, and aligned debt currency with cash generation.
• Cash Position: £116 million as of 30 June 2024, with total liquidity of nearly £300 million including RCF.
• 
  

Strategic Progress:

1. New Strategy and Value Creation Plan: Launched in March 2024, with a name change to evoke plc effective from May 2024.
2. Focus: Mid and long-term profitable growth and value creation through investment in capabilities and business transformation. The strategy is centered on a clear customer value proposition and competitive advantages.
3. Operational Enhancements: Reorganization to streamline decision-making and increase effectiveness, aiming for £30 million in cost efficiencies for FY24. Enhanced data-driven customer segmentation and personalized promotions.
4. Leadership Changes: Completed restructuring of the executive team, with nine out of eleven roles new since October 2023. Further changes to the wider leadership team are planned.
5. Brand and Product Developments: Repositioned Mr Green brand and refined the William Hill customer value proposition. New betbuilder product launched and successful, with more product improvements expected in H2 2024.

Outlook:

• H1-24 Adjusted EBITDA: Expected to be £35-40 million below plan, impacting FY24 expectations.
• Revenue Growth: Positive outlook with H2 2024 revenue growth expected to align with medium-term guidance of 5-9%.
• Cost Optimisation: £30 million in-year savings planned, with an incremental benefit of £5-10 million in H2 compared to H1.
• Marketing Costs: Expected to be £35-40 million lower in H2 compared to H1.
• Profitability: H2 2024 Adjusted EBITDA Margin expected to increase significantly to approximately 21%.
• FY25 Expectations: No change, including an Adjusted EBITDA margin of at least 20% and unchanged medium-term targets.

Per Widerström, CEO of evoke, commented:

“We are focused on mid and long-term profitable growth and value creation. During the first half, we have made bold and decisive changes to improve almost every area of the business. We are undergoing a complete reset and transformation, which, while significant, is necessary. This transformation will take time but will enhance operational efficiency, leading to a larger, more profitable, and cash-generative business in the future.

Our strategy defines what success looks like and how we will achieve it. While no journey is straightforward, we have learned a lot this year as we pursue our goals. Although it is disappointing that the first half’s financial performance is below plan, the underlying health of the business is strengthening, and the corrective actions we have taken increase our confidence in the soundness of our strategic approach and its potential for sustainable success.

I am pleased with the strategic progress made so far and confident that it will position us for profitable growth in H2 2024 and beyond. Our plans for 2025 and beyond remain unchanged, and the progress achieved during the first half reinforces our confidence in delivering our value creation plan.”