Evoke lowers FY24 expectations

Garance Limouzy August 22, 2024

SiGMA news

Evoke lowers FY24 expectations

Evoke Plc has issued a trading update for the first half of 2024. While the company reported some positive momentum in Q2, overall performance fell short of expectations, prompting a revision of its full-year 2024 forecasts. However, the Group remains optimistic about its strategic direction, with no changes to its FY25 outlook or long-term targets.

H1 2024 results

Evoke reported Q2 2024 revenue of approximately £431 million, maintaining a stable performance both sequentially and year-over-year. However, the company acknowledged that this was behind internal projections, primarily due to underperformance in its marketing and promotional activities during Q1, which impacted subsequent quarters.

– UK Online Revenue saw a modest increase of 3 percent, driven by a 6 percent growth in gaming. However, sports betting lagged, with continued effects from previous changes in marketing strategy and proposition. Evoke has since adjusted its leadership and commercial strategies, leading to early positive results, particularly with the launch of a new betbuilder product.

– UK Retail Revenue remained stable compared to H2 2023 but was 8 percent lower than in 2023, which had a strong comparative period. To address this, Evoke has initiated leadership changes and plans to roll out new gaming machines and an improved sports betting product by Q4 2024.

– International Operations reported a 2 percent revenue increase (4 percent in constant currency), with strong double-digit growth in core markets such as Italy, Spain, and Denmark. This was partially offset by a strategic shift towards profitability, including the exit from the US B2C business.

The company’s Adjusted EBITDA Margin for H1 2024 is expected to be around 13-14 percent, impacted by front-loaded marketing expenses and lower-than-anticipated revenues.

Future outlook

The company launched a new strategy and value creation plan in March, followed by a rebranding to “evoke” in May 2024. The strategy focuses on mid-to long-term profitable growth, with investments in the Group’s capabilities aimed at transforming the business and increasing competitiveness.

Looking ahead, Evoke expects H2 2024 revenue growth to align with its medium-term guidance of 5-9 percent. The company declares it has executed a cost optimisation program, delivering £30 million in savings, with additional benefits expected in the second half. As a result, profitability is anticipated to increase significantly in H2 2024, with the Adjusted EBITDA Margin projected to reach approximately 21 percent.

CEO Per Widerström (pictured above) commented, “While the first half financials are behind our plan, the underlying health of the business is strengthening. The corrective actions we have already taken make us confident in our strategic approach. We are on track for profitable growth in H2 2024 and beyond, and our plans for 2025 remain unchanged.”