Evoke (EVOK) Trading Update summary

Financial performance and outlook

• H1 2024 group revenue was £862m, down 2% year-on-year but up 4% from H2 2023, with Q2 revenue stable at £431m and UK Online up 3%.

• Adjusted EBITDA for H1 and FY24 is expected to be £35m-£40m below initial plans, with H1 margin at 13%-14% and H2 targeted at around 21%.

• Leverage is temporarily above 6x at H1, with a clear path to reduce below 3.5x by end of 2026.

• H2 2024 revenue growth is forecast at 5%-9%, in line with medium-term targets, and FY25 guidance remains unchanged.

• Strong liquidity position with nearly £300m available, including £116m net cash and £175m undrawn RCF as of 30 June 2024.

Strategic actions and operational changes

• £30m cost savings program underway, with H2 costs £5m-£7m lower and further efficiency reviews ongoing.

• Leadership team restructured, with 9 of 11 roles new since October 2023, and a focus on operational excellence and a winning culture.

• Commercial leadership changes and improved ROI tracking implemented after underperformance in UK online marketing.

• Shifted focus from in-house gaming cabinet development to third-party solutions, signing a multi-year deal for 5,000 new terminals.

• Enhanced data, AI, and automation capabilities, with new hires and improved customer segmentation and personalized promotions.

Divisional performance and growth drivers

• UK & Ireland online returned to positive year-on-year growth in Q2, with gaming revenues up 6% and sports benefiting from new product launches.

• International segment saw double-digit growth in core markets (Italy, Spain, Denmark), now comprising 60% of international revenue, with 4% constant currency growth in Q2.

• Retail division stable sequentially but 8% behind prior year due to gaming machine underperformance; new hardware rollout expected to drive improvement.

• Product innovation, such as Bet Builder, and improved customer value propositions are key growth levers for H2.

• Mr Green and William Hill brands refreshed, with new campaigns and proposition changes aligned to the new customer value proposition.