Evoke flags two “material uncertainties” over future as Bally’s Intralot deal progresses

Evoke has identified two “material uncertainties” over its ability to continue as a going concern as the William Hill and 888 operator progresses toward its proposed £243 million ($328.05 million) acquisition by Bally’s Intralot.

Both uncertainties are tied to the transaction. If the acquisition does not complete, Evoke said it would need to achieve a “sustainable and materially improved level of profitability and cash generation” to refinance its debt facilities, a requirement it described as a “significant execution challenge.”

The group has approximately £1.8 billion ($2.43 billion) in borrowings, including £769 million ($1.04 billion) of debt due in July 2028, while its £200 million ($270 million) revolving credit facility matures in January 2028. Management has described the debt burden as a “key constraint” if the takeover does not proceed.

CFO Sean Wilkins said the group’s capital position was an important factor behind the board’s support for the transaction. “The recommended acquisition provides a clearer path to a more sustainable capital structure, which was an important factor in the board’s unanimous recommendation,” he said.

Evoke’s second uncertainty relates to what would happen after completion. Its current directors said they have limited visibility over Bally’s Intralot’s “ability and intentions to operate the group under its ownership”.

Although Evoke said the issues “may cast significant doubt” on its ability to continue as a going concern, its directors said they have a reasonable expectation that the group has “adequate resources” to continue operating through September 2027.

Bally’s Intralot deal remains on track

Bally’s Intralot agreed the all-share acquisition of Evoke in June. Evoke said at the time that the combination would create a “global gaming and lottery champion”. 

Bally’s Intralot CEO Robeson Reeves subsequently ruled out an immediate breakup of Evoke, saying the transaction had been pursued with the “whole group” in mind. The transaction remains subject to regulatory and shareholder approvals, including an Evoke shareholder vote scheduled for August 17. Evoke is not issuing forward-looking financial guidance while the acquisition remains pending.

Evoke CEO Per Widerström said the approval process remained on schedule: “Progress with the relevant filings is going to plan, and we still expect to complete in the fourth quarter of 2026 or the first quarter of 2027.” 

Evoke posts flat H1 revenue as profit falls

The disclosures came alongside Evoke’s results for the six months ended June, published August 12. Revenue was £887.5 million ($1.20 billion), compared with £887.8 million ($1.20 billion) a year earlier. On a basis accounting for the closure of 270 William Hill betting shops, group revenue increased 2%.

Adjusted EBITDA declined 9.5% year over year to £150.2 million ($202.77 million), while gross profit fell 6.8% to £552.4 million ($745.74 million) as gaming duties and sales costs increased. Operating profit fell 70.1% to £11.7 million ($15.80 million). 

UK and Ireland online revenue reached £348.1 million ($469.94 million), up 3.5%, supported by a 6.7% increase in gaming revenue and stronger trading from William Hill. Revenue at 888 declined as the company continued to prioritize profitability and customer economics.

Adjusted EBITDA from the UK and Ireland online business increased 28% despite the higher tax burden. Approximately £30 million ($40.50 million) of the group’s £46 million ($62.10 million) increase in gaming duties came from UK operations.

Wilkins said Evoke had also reduced marketing spending while continuing to grow the business. “Our marketing year-on-year has dropped, but we have still managed to get that 4% growth,” he stated. “This has not just been a cost-cutting exercise.”

The retail business generated £245.6 million ($331.56 million) in revenue, down 2.6%, primarily because of store closures. Excluding closed shops, retail revenue increased 4% on a like-for-like basis. Betting revenue declined 3% after stakes fell 8%, while gaming revenue was down 2%.

International revenue declined 1.9% to £293.8 million ($396.63 million), while adjusted EBITDA fell 20%. Revenue increased 21% in Italy, and 13% in Denmark, but those gains were offset by weaker performances in Spain, Romania and other key markets. Evoke also faces higher gaming duties in Romania.

Evoke has launched a new William Hill app in Spain and expects product and commercial upgrades introduced during the first half to contribute to performance in the second half.

Against the backdrop of higher duties and mixed international trading, CEO Per Widerström said the group had taken steps to protect profitability and cash generation.

“As a result of the significant operational improvements we have implemented across the business in recent years, coupled with the successful mitigation of a meaningful proportion of the increased duty costs, we have been able to maintain operational momentum, deliver like-for-like revenue growth, and protect profitability and cash generation.”