- Third quarter revenue up 4%
- Return to year-on-year growth
- Full year guidance reiterated
Betting and gaming group Evoke (EVOK), formerly known as 888, revealed a return to year-on-year growth for the third quarter to the end of September, with revenue up 4% in constant currencies to £417 million.
The shares gained 4% to 59.6p on relief the business has returned to growth and after the William Hill and Mr Green operator reiterated full year forecasts.
More important for investors is the upcoming budget on 30 October given the threat of increased levies on the sector.
WHAT DID THE COMPANY SAY?
CEO Per Widerstrom commented: ‘I have now been in position for a year, and I am pleased that the turnaround of the business is working, with the first quarter of revenue growth since Q1 2022 and positive underlying trends.
‘We are achieving our plans to improve trading in the short-term, while simultaneously radically transforming the group’s capabilities for the long-term.’
The business delivered good underlying growth in the quarter with gaming up 10%, partially offset by client friendly results during September which Knocked around £17 million off revenue.
Excluding this impact, Evoke recorded revenue growth of 7% which is within the guided range of between 5% and 7% for the second half of the year. Cost savings of £23 million have been delivered so far in 2024, in line with plans to streamline the business.
Management reiterated full year guidance for an adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) margin improvement to 21% as well as 2025 expectations for ‘at least’ 20%.
In the medium-term, Evoke aims to deliver revenue growth of 5% to 9% a year and a 1% expansion in the adjusted EBITDA margin per year, with leverage moving below 3.5 times by the end of 2026.
THE JEFFERIES VIEW
Jefferies noted UK and Ireland online gaming revenue growth accelerated to 12% from 5% in the first half and the 29% growth in core international markets, including 31% in Italy.
‘Retail trends are well-positioned to improve after the new managing director appointment and new gaming machine rollout by 1Q25,’ added the broker.
