Reducing Operating Expenses by £25M: Evoke, William Hill's Owner, Proposes Cuts to Cushion Wage Enhancements
By 2025, Evoke — the parent company of 888casino, 888sport, and William Hill — aims to shed around £25 million ($32.37 million) from its operating costs. This move is a response to a first-quarter revenue growth that fell short of expectations and escalating labor costs.
After rebranding from 888 in 2023, the company's pre-tax losses climbed from £130.1 million ($168.4 million) in 2023 to £168.8 million ($218.5 million) in 2024. Adjusted EBITDA increased by 4% to £312.5 million ($404.5 million), while revenue rose by 3% to £1.75 billion ($2.27 billion). Despite this growth, early 2025's growth is projected to be in the low single digits, missing the full-year target of 5% to 9%.
CEO Per Widerström, who took the helm in October 2023, maintains an optimistic outlook: "Whilst a transformation of this scale is never easy, I am pleased with the strong progress we made during the year."
Strategic Shifts and Market Dynamics
Evoke initiated a £48 million ($62.1 million) cost-cutting plan in 2024, with a focus on decreasing marketing costs, employing automation and AI, and streamlining operations. The company also made adjustments to its global presence, such as purchasing Romania's Winner.ro and selling its US-facing 888 business to Hard Rock Digital. As a result,Evoke's regulated market exposure climbed to 95% of total revenues.
Despite the challenges, Evoke performed notably in the second half of 2024, contributing 63% of EBITDA for the entire year. The UK market expanded by 9%, accounting for over 55% of the company's online revenue, despite a 5% drop in retail sales. To boost retail performance, the company is installing new betting machines at all William Hill locations.
Widerström attributes their success to a shift towards high-value players, improved personalization, and enhanced features like bet builders on the William Hill platform.
Though gross profit remained stable at £1.15 billion ($1.49 billion), operating profit turned negative, with a £200,000 ($258,930) loss, compared to £24.2 million ($31.3 million) in 2023. The company also faced £20 million ($25.8 million) in costs from exiting the US and £10 million ($12.9 million) from acquiring Winner.ro.
To combat mounting labor costs, Evoke intends to slash an addition £15 million to £25 million ($19.4 million to $32.3 million) in expenses. This follows a wave of layoffs in 2024.
Going forward, Evoke remains committed to key markets like the UK, Italy, Spain, Denmark, and Romania, while refining its products. With updates, including revamped football and racing pages, expected throughout 2025, Evoke aims for "sustainable profitable growth."
Currently, William Hill Online holds a 9% share of the UK market, while its retail segment leads with 22%. In Romania, its recently acquired business captures a 7% share across sportsbook and casino operations. Despite a slight increase in net debt by 0.5%, the company is positive that its turnaround strategy and tighter operations will fortify its position for upcoming regulatory changes and market advancements.
- In an effort to counteract the projected low single-digit growth for early 2025 and meet the full-year target, Evoke plans to lower expenses by £15 million to £25 million at 888casino, despite a strong sports sector.
- Despite the challenges facing Evoke, including increased labor costs and mounting expenses from the US exit and Winner.ro acquisition, the company registered growth in the second half of 2024, lowering its marketing costs and improving high-value player strategies at 888casino and William Hill.
- In response to the ongoing cost-cutting plan initiated in 2024, Evoke aims for "sustainable profitable growth" by focusing on streamlining operations, employing automation and AI, and refining products at 888casino and William Hill, even though revenue growth in 2024 fell short compared to 2023.
