William Hill owner shares plunge after profit warning

Evoke actions plunged on Thursday as the owner of William Hill warned that first-half profits would significantly miss expectations.

The company’s share price fell 12.8 per cent to 75.3 pence at 12:30pm after it told investors that first-half adjusted profits before adverse events would be around £35m to £40m “behind plan”.

Evoke, until recently known as 888 Holdings, expects its profit margins for the six months ending in June to be around 13 to 14 percent, largely due to high marketing costs.

He also said margins were impacted by the timing of cost-saving actions and lower than expected turnover, which amounted to around £431 million in the second quarter.

Evoke’s UK retail business saw sales decline by 8 percent for the first six months of 2024 due to strong comparative performance last year.

In comparison, domestic online and international revenues increased marginally, although the former were affected by lower-than-expected returns from marketing and promotional activities.

Meanwhile, the latter’s double-digit growth in key markets such as Italy, Spain and Denmark was offset by lower turnover in “optimised markets” and the exit of its business-to-consumer operations in the United States.

Evoke is focusing on its core markets under a new strategy and “value creation plan” announced in March.

It follows a turbulent year for the group, marked by the departure of chief executive Itai Pazner, slow international growth and stricter gambling regulations in the UK.

The London-based company’s revenue rose 38 percent in 2023 due to the acquisition of William Hill, but fell 8 percent on a pro forma basis.

Adjusted pre-tax profits also fell by around three-quarters to £20.86m as a result of rising finance costs related to debt built up from the purchase of the UK bookmaker.

Since last October, the company has revamped its management team, replacing nine of its 11 top executives.

Among them is Per Widerstrom, former head of Fortuna Entertainment Group, the largest betting and gaming operator in Central and Eastern Europe, who succeeded Pazner as CEO.

Widerstrom commented: ‘We are undertaking a complete business reset and transformation, and the scale of change is significant, but necessary.

“This transformation will take time, but it will improve operational efficiency and result in a larger, more profitable and cash-generative business in the future.”