Evoke shares plummet as William Hill owner's losses triple on restructuring costs

Evoke shares plummeted by 17.3 per cent to 59.05p on Wednesday following the William Hill owner's announcement of an annual loss totalling £191.4m, a figure that significantly expanded from the previous year's figures, nearly tripling the loss reported for 2023 due to escalating restructuring and financial costs.

Despite a revenue boost of three per cent reaching £1.75bn, and an uptick in adjusted EBITDA by four per cent, exceptional costs, particularly those linked to its withdrawal from the US customer market, pushed the group further into losses, as reported by City AM.

The betting conglomerate cautioned that revenue growth for the first quarter would likely hover in the low single digits, not meeting its full-year goal of five to nine per cent.

It pointed to strengthened responsible gambling regulations and diminished promotional impact as key reasons for this subdued increase.

On a brighter note, Evoke has projected an adjusted EBITDA rise of £18-28m in the first fiscal quarter as a consequence of stringent cost control measures.

Amidst adapting to regulatory cost inflations from employer national insurance and national living wage increases, Evoke disclosed plans to save an extra £25m for the current year as part of its strategic overhaul.

Per Wilderström, the CEO, characterised 2024 as a "pivotal year" given the headway made in sustaining revenue growth against the backdrop of looming hurdles.

He emphasized the necessity of honing new operational strategies and the reliance on a revitalized, dedicated leadership team to enact them, admitting: "We are under no illusions: this is a complete reset of this business."

Despite the decline in share price, analysts at Peel Hunt pointed out that while first quarter revenue fell short of expectations, "EBITDA continues to make progress... comfortably on track of our FY25 forecast of £359m."