Evoke’s first half revenue came to £862m, in line with its July profit warning, down 2% year-over-year. Widerström said this was behind the operator’s initial plan, but insisted the underlying health of the business was getting stronger.
“We are completely transforming this business,” he said. “Whilst the scale of change is significant, it is necessary for us to deliver mid and long-term profitable growth and value creation.
“We have already taken bold, decisive actions to both instigate a turnaround in short-term trading performance while simultaneously investing into the group’s capabilities to drive step-change value creation and build a bigger, more profitable, more sustainable, and more cash generative business in the future.”
Evoke said the drop was to an 8% year-on-year decline for UK retail in particular. These struggles, coupled with a lower than expected return on marketing investment for UK online and £72m in costs associated with 888’s US exit, hit earnings.
Adjusted EBITDA declined 26% on the previous year to £115.5m, a 13.4% margin. Marketing costs during the six-month period were up £16m (12%) year-on-year, with a temporarily elevated online marketing ratio of 25%. Second half marketing costs will be between £35m and £40m lower than H1 on a more efficient marketing strategy, Evoke said.
However the strategic review that led to the operator’s repositioning and rebrand to Evoke leaves the business in a better position, the company said.
“Clear and robust brand positions, focused on core customer needs, together with a suite of product improvements is enabling an ongoing shift in marketing approach from pure promotions-led towards product-led as we improve our proposition.”
Green shoots for Evoke in H2?
Evoke expects to hit its previous guidance of 5-9% revenue growth in the second half of the yar. Cost savings of £30m will increase profitability, aided by the US withdrawal and an optimised busines structure. This includes a total renewal of its C-suite, with 9 of 11 executives replaced in H1 amid the push to drive strategic change.
There is no change to existing FY 2025 expectations. The group hopes for a 2025 EBITDA margin of 20%, and medium-term revenue growth of 5-9% per year.
We have a clear plan, vision and financial targets,” Widerström added. “As a result of our strategic progress and the enhancements already made to the business, I am even more confident about delivering our value creation plan and driving sustainable profitable growth over the coming years.”
Original article: https://igamingbusiness.com/finance/evoke-h1-results-2024/
