Evoke FY25 Loss Climbs 149%, While CEO Addresses Investor Concerns

Evoke FY25 loss surged 149% to £541 million, presenting a stark financial challenge for the gaming operator. The company’s group revenue grew 2% year-over-year to £1.78 billion during the period. EBITDA climbed 43% to £301 million, although profit after tax declined significantly. Moreover the revenue growth represented an effective real-terms decline given inflation rates surpassed this figure across core markets. CEO Per Widerström addressed shareholder concerns regarding the mixed financial performance. The gaming operator faces scrutiny as it balances operational improvements against mounting losses.

Evoke Reports Mixed FY25 Financial Results

The gaming operator posted Q4 revenue of £464 million, representing a 7% quarter-over-quarter increase but a 3% year-over-year decline. Gaming emerged as the primary growth driver during the quarter, climbing 9% year-over-year across all divisions. In contrast, betting revenue fell 22% year-over-year, reflecting operator-friendly sporting results in the prior-year comparison period.

Regional performance varied significantly. UK&I revenue declined 3% during the full year, driven by a 12% drop in betting revenue despite 2% gaming growth. Meanwhile, International markets demonstrated stronger momentum with 8% revenue growth, fueled by double-digit gains in Italy, Denmark, and Romania. Retail operations contributed positively, with revenues advancing 6% supported by growth in both sports and gaming segments.

The adjusted EBITDA margin improved by 220 basis points to 20%. Underlying free cash flow reached £188 million, reflecting operational strength. The leverage ratio improved from 5.7x to 5.2x during the period.

November’s Autumn Budget imposed substantial fiscal pressures on the operator. Remote gaming duty doubled in April, while general betting duty faced a 25% increase. The company responded by closing approximately 270 William Hill shops across the UK to protect margins against an annual tax impact potentially reaching £135 million by 2027.

CEO Per Widerström Responds to Shareholder Concerns

Widerström opened the results discussion with a direct assessment: “These results are disappointing and not acceptable”. The CEO insisted the company understands what went wrong and knows how to fix the issues.

When questioned about shareholder value amid declining share prices and increased debt, Widerström emphasized his personal stake in the company’s success. “Being a shareholder myself, I can reassure you that we are absolutely focused on delivering shareholder value,” he stated. He highlighted that after years of revenue and profitability decline, the company returned to growth while expanding EBITDA margins and deleveraging.

The CEO outlined three core pillars driving the value creation plan: profitable growth, expanding EBITDA margin, and deleveraging. He reinforced this commitment by stating, “I will not rest until this business is performing the way it should and can do”.

Regarding geographic performance, Widerström pointed to strong market outperformance in Italy, Denmark, and Spain. For the UK and Ireland, he acknowledged gaps requiring attention but announced plans to push the William Hill brand harder than ever.

On mergers and acquisitions, the CEO remained firm: “We are laser-focused on our value creation plan, we have no plans for M&A”. However, he indicated the company would pursue capital-light, high-impact partnerships.

What Do Market Analysts Say About Evoke’s Performance?

Financial analysts delivered mixed assessments of Evoke’s performance despite the statutory losses. InvestingPro analysis indicated the stock appears undervalued at current levels based on Fair Value metrics, placing it among opportunities on the most undervalued stocks list. Shares surged 84.5% year-to-date, although the one-year performance showed a 17.8% decline.

Deutsche Bank adopted a more cautious stance in January, cutting Evoke’s FY26 and FY27 EBITDA forecasts by 12% and 18%, respectively. The bank projected earnings per share would fall by 40% and 52% due to high financial leverage. Deutsche Bank assumed UK online growth of just 2.5% in FY26 and FY27, with margins falling from 23% in FY26 to 13% by FY27.

Technical indicators suggest a bearish trend, with valuation metrics remaining unfavorable due to ongoing losses. Nonetheless, management expects to deliver at least 50% mitigation of the UK duty impact in the first full year post-implementation.