AUS
NZ
UK
CA
USA
IND
Highlights
- Evoke reported Q3 revenue of £417 million, marking a 3% increase year-over-year and the first growth since Q1 2022.
- Online revenue grew by 8%, with core markets accounting for nearly 85% of online earnings, while retail revenues fell by 9% due to customer-friendly betting outcomes.
- The company maintains guidance for H2 2024 revenue growth of 5-9% and an Adjusted EBITDA margin improvement to approximately 21%.
Evoke (LSE:EVOK), a prominent player in the global betting and gaming industry with renowned brands such as William Hill, 888, and Mr Green, has released a trading update for the three-month period ending September 30, 2024 (Q3-24). The company’s financial results reflect solid growth and improved market positioning, highlighting a positive trajectory for the remainder of the year.
Financial Highlights (Unaudited)
- Group Performance: Evoke reported revenue of £417 million, a 3% increase compared to Q3 2023, translating to a 4% rise in constant currency (cc). This marks the company’s first quarter of year-over-year growth since Q1 2022, buoyed by market share gains in key international markets. The underlying performance remains strong, with a notable 10% increase in gaming revenue. However, the Group faced a setback due to customer-friendly sports outcomes in September, which had an estimated £17 million impact on revenue. The company maintains its expectation for the second half of 2024 to align with its mid-term target of 5-9% year-over-year growth.
- Online Sector: Online revenue grew by 8%, with core markets seeing a robust 11% increase. Core markets now account for nearly 85% of the Group’s online revenue, including Romania’s contribution to this growth.
- UK & Ireland Online: Revenue in the UK and Ireland increased by 3%. The gaming segment experienced accelerated growth of 12%, but this was partially offset by a decline in betting revenue, which fell by 13%. The weaker betting performance was significantly impacted by favorable sports results in September, particularly within UK football, leading to an estimated revenue impact of £10 million.
- International Markets: International revenue surged by 14% (17% cc), driven by an impressive 26% growth in core international markets, including Italy, Spain, Denmark, and Romania. Romania has emerged as a core market, contributing substantially to this growth.
- Retail Operations: Retail revenues decreased by 9%, primarily due to lower-than-expected betting net win margins, also influenced by the customer-friendly results (approximately £5 million impact). The newly appointed Retail managing director has initiated a series of measures to enhance short-term trading. The company plans to roll out over 5,000 new gaming machines starting in October, aiming to complete the rollout across its entire estate by Q1 2025.
Outlook
Evoke has reaffirmed its previously issued guidance for the second half of 2024, expecting revenue growth between 5-9%, with an Adjusted EBITDA margin projected to improve to around 21%. The company also confirmed its full-year expectations for FY25, including a minimum Adjusted EBITDA margin of 20%. Its medium-term targets remain unchanged, with anticipated annual revenue growth of 5-9%, approximately 100 basis points of Adjusted EBITDA margin expansion each year, and a target leverage of below 3.5x by the end of 2026.
