Evoke reports sharp rise in H1 losses amid high street struggles, strategic overhaul

William Hill owner Evoke reported an increase in its losses for the first half of 2024, largely due to declining performance in its UK betting shops and rising financial costs. The company's losses soared to £143.2 million ($183.83 million) for the six months ending June, a stark contrast to the £32.5 million ($41.72 million) loss recorded in the same period last year.

Although the London-based operator experienced a slight revenue increase of 3.9% from the second half of 2023, it reported a 2% year-on-year decline, bringing total revenue to £862 million ($1,106.57 million). This downturn was primarily attributed to challenging market conditions at its high-street betting shops and the underperformance of its in-house gaming machines, which fell behind the competition. Evoke said it would be rolling out a third-party solution in the fourth quarter of this year.

Evoke also faced a downturn in turnover outside its core markets and a reduction in sports betting activity, which the company attributed to the growing prevalence of recreational customers. While online revenue across the British Isles showed a marginal increase, it fell short of expectations due to weaker-than-anticipated returns on the company's additional marketing investments.

The company’s profitability was further impacted by increased finance costs associated with the debt-funded £1.95 billion ($2.5 billion) acquisition of William Hill two years ago.

Per Widerström, Chief Executive of Evoke, acknowledged the disappointing financial performance but said that the underlying health of the business is continually getting stronger. "The corrective actions we have already taken give us even more confidence that our strategic approach is sound and that we will achieve sustainable success," he said.

In March, Evoke introduced a new strategy aimed at refocusing on its core markets and reducing costs through investments in artificial intelligence and automation. Widerström stated the necessity of these changes for long-term growth: "Whilst the scale of change is significant, it is necessary for us to deliver mid and long-term profitable growth and value creation."

The company is optimistic that its £30 million ($38.51 million) cost-saving program, combined with more effective marketing strategies and improved products, will lead to a significant improvement in profits during the second half of 2024.

Evoke’s results were released shortly after Paddy Power owner Flutter raised its annual guidance following a strong second-quarter performance. Flutter’s revenue surged by 22% to £2.8 billion ($2.59 billion) in the three months ending June, driven by growth in the United States and increased betting activity during the Indian Premier League and European Football Championships.

Despite the challenging market conditions, Evoke's shares saw a 4.7% rise to 57.3p in early trading on Thursday, though the share value has declined by approximately 48% over the past year.