During a call on Thursday regarding Evoke's delayed fiscal year 2025 results, CEO Per Widerström reassured analysts and investors that the company has been consistently focused on delivering shareholder value. One analyst pointed out the persistent decline in share prices and rising debt since Widerström took the helm.
"Being a shareholder myself, I can reassure you that we are absolutely focused on delivering shareholder value," Widerström stated in response. "After years of decline in terms of revenue and profitability, we are back to growth. We have substantially improved the EBITDA margin and we are deleveraging. That is what we can control, and that is what we are focusing on."
On the financial front, Evoke reported a 2% year-over-year increase in group revenue, reaching £1.78 billion, while EBITDA surged by 43% to £301 million. Despite this revenue growth, the company faced significant losses, with profits after tax sinking by 149% to a loss of £541 million.
Regulus Partners commented on Evoke's revenue growth, describing it as "effectively a real-terms decline, given inflation is running higher than this in all core markets." They noted a 3% decline in revenue from the UK and Ireland, attributed to a 12% drop in betting revenue, despite a 2% increase in gaming revenue.
CFO Sean Wilkins provided an update regarding the impact of the Remote Gaming Duty increase that took effect in April, assuring analysts that there had been no noticeable effects. He expressed satisfaction with the performance of Evoke's UK online business and did not anticipate a shift in revenue mix due to the tax hike.
Evoke, similar to Bally's and Entain, aims to capture market share in the UK as smaller operators are adversely affected by the tax changes. "We expect to see market consolidation, and we think that a long tail of players will get hit disproportionately hard by the tax implementation, which will allow us to improve our market share," Widerström explained.
International revenue saw a noteworthy increase of 9%, driven by record earnings in Italy and Denmark. Widerström highlighted that the operator is gaining market share in both regions. Additionally, he confirmed the closure of several UK retail outlets, with the segment declining by 1% over the year. He stated, "We have a fantastic plus 1,000 shops that are providing an excellent service, experience, and entertainment to our customers." According to him, reducing the number of shops has helped ensure long-term sustainability in cash generation and profitability.
Widerström mentioned external macro-economic trends influencing retail betting performance, noting that a thorough review of the company's estate had been conducted.
When discussing cash flow and debt, significant issues for investors and analysts post-results, the company's net cash for 2025 ended at minus £34 million, a stark decrease from a positive inflow of £9 million in 2024. Net debt slightly rose to £1.86 billion from £1.79 billion the previous year. "It’s fair to say that I was a little disappointed at our cash flow performances in the year, albeit a good chunk of this is just timing related," Wilkins remarked.
The company incurred a one-time cost of £8 million due to a reclassification of historical gaming tax in Austria and paid a one-off licensing fee in Italy as the market changed its licensing regulations.
Widerström declined to answer questions regarding the ongoing strategic review, which has included negotiations with Bally's Intralot about a potential £225 million takeover of Evoke. These discussions are expected to conclude in May. During Bally's Intralot's recent earnings call, CEO Robeson Reeves highlighted Evoke's UK online and international businesses as promising opportunities. Reeves stated, "We see a compelling opportunity to bring our operating model to a significantly larger business and the potential to transform its financial performance through synergies we are uniquely positioned to deliver."
