Evoke (EVOK) H2 2024 earnings summary

Executive summary

• Achieved a business turnaround in 2024, returning to growth after three years of decline, with full-year revenue up 3% and H2 revenue up 8% year-over-year, driven by operational transformation and focus on core markets.

• Adjusted EBITDA reached £312 million, up 4% year-over-year, exceeding guidance, with H2 margin at 22.1%.

• Core markets now represent about 90% of revenue, with online growth of 12% year-over-year in these markets.

• Transformation included a reset of strategy, new leadership, cost savings, and a focus on operational excellence, automation, and brand repositioning.

• Positioned for strong growth in FY25 and beyond, targeting 5-9% revenue growth and 20% Adjusted EBITDA margin.

Financial highlights

• FY24 revenue was £1,754.5m, up 3% year-over-year; online revenue grew 6% to £1,248.3m, while retail declined 5% to £506.1m.

• Adjusted EBITDA rose 4% to £312.5m, with international online EBITDA up 31% and UK & I online flat.

• Adjusted profit before tax was £11.8m; reported loss after tax was £191.4m, impacted by exceptional items.

• Net cash (excluding customer balances) increased by £19m, but net debt rose by £30m to £1.79bn due to transformation costs and M&A timing.

• Leverage reduced from 6.7x to 5.7x year-over-year, with a target of under 3.5x by 2027.

Outlook and guidance

• Confident in achieving 5%-9% annual revenue growth, with Q1 2025 adjusted EBITDA projected to be £18-£28m higher year-over-year.

• EBITDA margin expected to be at least 20% in 2025, supporting further deleveraging.

• CapEx for 2025 increased to £100-£110m, driven by retail investment, AI, and product development.

• Retail expected to return to growth post-cabinet rollout; international online to deliver double-digit growth.

• Further cost savings of £15-£25m identified for FY25, supporting ongoing margin improvement.