Evoke explores sale options as share price struggles under debt burden

• William Hill owner Evoke confirms strategic review that may result in company sale or asset divestment.
• Announcement follows 36% share price decline in 2024 and net debt of £1.79 billion.
• Morgan Stanley and Rothschild appointed as financial advisers to explore alternatives.

Evoke, the Gibraltar-incorporated operator behind William Hill, 888 and Mr Green, announced today (10 December) that it has initiated a strategic review that could lead to the sale of the entire company or selected business units.

The London-listed gambling group confirmed it is exploring options to maximise shareholder value following recent media speculation about its future. Morgan Stanley and Rothschild have been appointed as joint financial advisers to assist with the review process, according to company filings.

The announcement represents a potential turning point for a company that has struggled with debt following its £1.95 billion acquisition of William Hill in 2022. The stock remains -36% YTD and well below analyst consensus targets of 100p.

£1.79 billion net debt in 2024

Evoke’s financial position has been under pressure throughout 2024. The company reported net debt of £1.79 billion at year-end, with leverage standing at 5.7 times adjusted EBITDA, down from 6.7 times at the half-year mark.

The group targets leverage below 5.0 times by the end of 2025, with a medium-term goal of sub-3.5 times by 2027. These deleveraging targets have been postponed from earlier projections due to increased investments in retail refurbishments, artificial intelligence (AI) systems and online products.

Finance costs totalled £168 million in 2024, contributing to a statutory loss of £191 million, nearly triple the £65 million loss recorded in 2023. Exceptional costs of £79 million relating to the US market exit, restructuring expenses and integration work further impacted profitability.

The company achieved adjusted EBITDA of £312.5 million for 2024, slightly ahead of the top end of its guidance range, though operational earnings remain constrained by the substantial debt burden from the William Hill acquisition.

Italian business as potential asset sale

Prior to announcing the broader strategic review, Sky News reported in November that Evoke had appointed Morgan Stanley to evaluate options for selling its Italian online business as a contingency measure if the UK tax increases materialised.

Italy represents one of four core markets within Evoke’s international division, which also includes Spain, Denmark and Romania. The international unit contributed just under 1/3 of group revenue and around half of EBITDA in half-year results.

The Italian operation has delivered consistent growth, with the company highlighting continued market share gains driven by the 888 brand. In its October Q3 update, Evoke reported strong casino growth in Italy supported by localised features and proprietary content from its in-house Section8 studio.

Any sale of the Italian business could attract interest from major European gaming groups, given the market position and growth trajectory of Evoke’s 888 casino offering in the jurisdiction. Sources indicated the move was designed to strengthen the company’s balance sheet in response to the UK tax environment.

UK tax increases compound pressure

The strategic review follows a severe blow to UK gambling operators from Chancellor Rachel Reeves’ autumn budget in November 2024.

Remote gaming duty increased from 21% to 40% from April 2026, with a new 25% general betting duty for online sports betting taking effect from April 2027, as confirmed by the Office for Budget Responsibility.

Evoke withdrew its medium-term financial targets following the announcement, warning the tax changes would increase duty costs by £125 million to £135 million annually once fully implemented in 2027. The company expects an £80 million impact in 2026 before mitigation measures.

Chief Executive Per Widerström described the decision as “highly damaging for the economy and consumers”, warning it would result in thousands of job losses across the industry. The company said it already paid £329 million in taxes to the UK in 2024, equivalent to 60% of its UK profit.

“As an industry, we have consistently warned of the impact on jobs, investment in the UK, and player protection that these changes would have, yet sadly the Government has chosen not to listen,” Widerström stated in response to the budget.

“We will begin immediately on executing our mitigation plans, which involve a significant reduction in investment into the UK, and, very regrettably, the likely need for thousands of jobs to be cut up and down the country.“

Mitigation measures and job cuts planned

The company expects to mitigate approximately 50% of the tax impact through supplier savings, reduced marketing expenditure, retail store closures, operating cost reductions and potential changes to customer offerings. Evoke has also warned the tax increases could drive more customers to unregulated betting markets.

“These tax changes will reduce the overall level of tax the regulated industry pays in the UK, and more importantly it will have a negative impact on player protection as these changes will incentivise activity moving to the illegal and dangerous black market,” Widerström added.

The Betting and Gaming Council described the measures as a “devastating hammer blow” to the industry, with chief executive Grainne Hurst noting the online tax rates are now among the highest in the world.

Strategic transformation shows early progress

Despite financial headwinds, Evoke returned to revenue growth in 2024 for the first time in three years. Full-year revenue rose 3% to £1.75 billion, with online operations driving performance through 12% constant currency growth across core markets in the second half.

Widerström, who joined in October 2023, implemented substantial operational changes throughout 2024. The group exited its US B2C operations, selling assets to Hard Rock Digital, and acquired Winner.ro to establish Romania as its fifth core market.

Core markets of the UK, Italy, Spain, Denmark and Romania now account for 90% of revenue, with the company focusing resources on jurisdictions with established regulatory frameworks and higher barriers to entry.

“2024 was a pivotal year for Evoke as we launched and implemented our new strategy for success, radically transforming almost every area of the business,” Widerström said when reporting full-year results in March.

The company delivered £45 million in recurring cost savings during 2024, with additional savings of £15 million to £25 million identified for 2025 to offset rising UK National Insurance and Living Wage costs.

Uncertain transaction prospects

Evoke cautioned shareholders there is no certainty any transaction will materialise, nor regarding the terms of any potential deal. The company stated it will provide further updates “when and if appropriate”.

Because Evoke is registered in Gibraltar, any takeover offer would not be regulated by the UK Panel on Takeovers and Mergers, though the company’s articles contain certain takeover-related provisions.

With core markets representing the vast majority of operations and transformation initiatives showing early results, potential acquirers may find value in Evoke’s portfolio of established brands and market positions. The strategic review outcome could reshape the competitive landscape in European online gambling markets.