Evoke warns on earnings as tax hike, strategic review unsettle investors

British gambling group Evoke said on Tuesday its full-year 2025 revenue would come in below expectations and declined to provide a 2026 outlook, citing an ongoing strategic review that could result in a sale. The announcement triggered a sharp drop in the company’s share price, which fell as much as 12% during the day.

The operator of William Hill and 888 forecast 2025 revenue of approximately £1.79 billion ($2.47 billion), a 2% increase from the prior year but below the £1.84 billion ($2.54 billion) average expected by analysts. Fourth-quarter revenue fell 3% to around £464 million ($639.84 million), which the company attributed to more favorable sports results for betting operators in the same period of 2024.

Evoke said adjusted earnings before interest, tax, depreciation, and amortization for the year ended December 31 were expected to be in the range of £355 million ($489.53 million) to £360 million ($496.43 million). While that would represent a 14% year-on-year increase, it is below the company’s earlier forecast of more than £362 million ($499.19 million).

The company’s share price stood at around 25 pence on Tuesday, giving it a market capitalization of £132 million ($182 million). Shares have lost more than a third of their value since November, when UK Chancellor Rachel Reeves raised online betting duties and remote gaming taxes in the budget. Over the past five years, Evoke’s stock has fallen more than 90%.

Evoke has not set a date for the release of its audited 2025 financial results but said they would be presented “in due course.”

Chief Executive Per Widerström said the company had responded promptly to the tax changes. “We have moved quickly and decisively to execute on our mitigation plans, including the closure of retail stores that are no longer sustainable as well as broader cost savings,” he said. “An updated strategic plan will be shared in due course.”

Chief Executive Per Widerström

The group launched a strategic review in December following the budget announcement, including the possibility of a full or partial sale. Evoke generates about two-thirds of its revenue in the UK, leaving it more exposed to domestic regulatory changes than larger, more internationally diversified peers such as Flutter and Entain.

In a note to clients, Berenberg analyst Jack Cummings wrote: “We continue to regard this (strategic review) decision as logical given the debt stack, but the eventual outcome of the strategic review remains uncertain.”

Broker Peel Hunt downgraded the stock from “buy” to “under review” on Tuesday. Analyst Ivor Jones said Evoke required “material change” to address its financial and operational challenges.

Reports last week suggested that casino group Bally’s and British bookmaker Betfred were exploring possible acquisitions of Evoke’s retail assets. The company had previously warned, in a statement issued on the evening of the UK budget, that the increased tax burden could raise its costs by between £125 million ($172.37 million) and £135 million ($186.16 million) annually from 2027 without mitigation.

Evoke posted a pre-tax loss of £168.8 million ($232.77 million) for 2024.