Evoke’s H1 Results: A Shift to Profitability Amidst Market Challenges
Evoke’s recent half-year results for 2025 reveal a nuanced landscape where a strategic pivot towards profitability has influenced its market performance, particularly impacting the UK and Ireland segments.
Despite a challenging environment, Evoke reported a commendable 3% increase in group revenue year-on-year, totaling £887.8 million ($1.12 billion) compared to £862 million in the same period last year. This aligns with earlier forecasts issued in July, indicating that international expansion has played a vital role in compensating for declines in domestic segments.
The standout achievement this half was a notable 13% revenue surge within Evoke’s international division, which now constitutes 33.7% of the overall revenue. Conversely, the UK and Ireland market, Evoke’s primary revenue generator, witnessed a slight revenue dip of 0.7% in its online segment and a more substantial 2.4% decline in retail revenue, amounting to £336.2 million. This dip was largely attributed to challenging year-on-year comparisons, particularly in light of the absence of significant sporting events.
Intriguingly, brand performance varied within the UK and Ireland division. While William Hill experienced growth, contributing to a 4.4% increase in overall gaming revenue, 888’s results reflected a downturn due to a more disciplined marketing strategy.
A critical metric, EBITDA, soared more than threefold to £141.3 million, alongside a substantial 43.6% rise in adjusted EBITDA. Although Evoke operated at a statutory net loss, it significantly reduced this figure compared to the previous year, reflecting improvements in both revenue and overall operational efficiency.
Euro 2024’s Impact on Financial Comparisons
The lack of compelling sporting events has clouded the UK and Ireland retail landscape, showing a revenue drop of 2.4% to £252.2 million. Additionally, the number of William Hill shops declined by 2.2%, underscoring ongoing struggles in high street environments.
Despite these challenges, Evoke is making strides within its retail estate, having successfully rolled out 5,000 gaming machines. CEO Per Widerström noted that this rollout has enhanced customer engagement, with gross win per machine up by 15% compared to last year’s Q3. Looking ahead, Evoke plans to implement further enhancements to its machines in the second half.
Minimal Impact Expected from Romanian Tax Changes
In the international realm, Evoke’s revenue rose 13% to £299.4 million, bolstered by strong growth in Italy and Denmark, while the acquisition of Winner pushed Romanian revenue into the triple digits. However, recent tax increases in Romania were flagged by Widerström, who suggested that while unwelcome, their impact would likely remain minimal.
Caution Over Potential UK Tax Hikes
The potential for increased taxation in the UK has prompted caution among Evoke’s leadership. The Treasury’s proposal to implement a single remote gambling tax has raised eyebrows, especially if it significantly hikes current rates. CFO Sean Wilkins emphasized the need for a balanced approach to avoid fostering a black market, which would undermine both revenue and player protection.
Cost Reductions Fuel Profit Improvements
Amidst total revenue gains, Evoke also successfully trimmed costs, particularly due to its exit from the US market. This resulted in a gross profit increase of 5.8%, leading to an operating profit of £39.1 million, a stark contrast to the previous year’s loss of £67.2 million. Adjusted EBITDA saw a significant boost, reflecting effective management strategies.
Positive Outlook for the Future
Widerström expressed optimism about the company’s trajectory, highlighting a strategic transformation that is yielding tangible results. With ongoing revenue growth and operational reset, Evoke is well-positioned for future success.
As the company looks toward the latter half of the fiscal year, it aims for revenue growth between 5% to 9% and anticipates further enhancements that will bolster profitability.
With strong product launches and operational efficiencies on the horizon, Evoke is indeed setting the stage for a promising future.