Shares in William Hill owner Evoke rose on Friday after the gambling group lifted profit guidance, following a second consecutive quarter of revenue growth.
Group revenues were up 13 to 14 per cent on a constant currency basis during the three months to 31 December, Evoke said, as online sales rocketed by 18 to 19 per cent and the bookie cashed-in on ‘operator friendly’ sports results.
Evoke, which also owns the 888 and Mr Green brands, in undergoing a major strategy shake up that sees the group re-focus its energies on core markets, and reduce costs by investing in AI and automation.
Boss Per Widerström told shareholders the ‘significantly improved underlying momentum in the business gives me real confidence’ that Evoke’s ‘turnaround is working and we are well positioned to continue our growth trend into 2025’.
Revenues for the second half of 2024 are now expected to come in around 8 per cent higher, the high end of a previously forecast 5 to 9 per cent guidance range.
But Evoke credited its ‘strong cost control and an increasingly efficient operating model’ as the operator said it now expects full-year adjusted earnings before nasties to come in ‘well ahead of market expectations’ at the ‘high end’ of a £300million to £310million guidance range.
Evoke scores two consecutive quarters of revenue growth
Widerström said: ‘2024 was a pivotal year as we started to implement our new strategy for success, radically transforming almost every area of the business, and moved decisively and at pace to position evoke for mid- and long-term profitable growth.
‘We go into 2025 with improving momentum as we continue to execute against our value creation plan.’
Evoke shares were up 7.8 per cent to 74.05p in early trading. They remain around 5 lower over the last 12 months and more than 80 per cent below their Covid-era high of 458p in September 2021.
It comes at a challenging time for Britain’s betting groups, whose growth momentum is facing potential stumbling blocks in the shape of potential domestic tax hikes, growing competition in key markets and regulatory pressure.
Evoke’s profitability has also been affected by growing finance costs from the debt-funded £1.95billion takeover of William Hill three years ago.
Analysts at Peel Hunt upgraded their forecasts for Evoke’s full-year adjusted earnings from £284million to £309million, but maintained a target price of 110p.
Peel Hunt’s Ivor Jones and Douglas Jack wrote in a note on Friday: ‘Today’s trading update confirms our view that the changes Evoke’s team have made to the business are paying off.
‘Marketing, product and operations all appear to be greatly improved. Despite this, and today’s success in meeting guidance, we believe it is too early in FY25 to be upgrading.
‘The Retail business in particular has to absorb the additional employment cost announced with the budget. In addition, while gambling has historically proven resilient in recession, there is scope for weakness in consumer demand to impact the business.’
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