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Evoke (GAMHOL Secured; B1 Neg/B/BB-) 1H (to June) results

CONSUMER CYCLICALS

This is online betting co 888 Holdings - changed its name earlier this year to Evoke.

  • 1H revenue was £862m down -2% yoy and split (exactly!) half/half between the first two quarters.
  • Adj. EBITDA margin is expected to be 13-14% (£112-120m) which it says is £30-40m behind original plan. Its blaming it on weaker headline and "timing of cost savings". Consensus was around original plan at £165m.
  • It's carrying a £1.8b debt load which on a flat EBITDA to 1H would leave it gross 7.5x levered. It sees itself >6x levered right now and says "clear path to rapid deleverage over coming years". Target is <3.5x by end of '26. £116m cash and £175m undrawn RCF on hand for liquidity.
  • Guidance is for 2H revenue of £871-904m (+5-9% growth) and EBITDA margin to expand to 21%. It would leave it gross 5.7x/net 5.4 levered.
  • FY revenue is in-line with consensus at £1.75b but EBITDA well above (c19% margin). It hasn't crossed 20% in recent years.

Nothing on FCF in the trading update - Moody's saw it finally turning positive on that this year. Most of the deleveraging is dependent on earnings - which looks to be pushed back to the 2H now - Moody's may downgrade without waiting. New 10.75% £30s trade at 9.4%/T+550/OAS+515 pricing to 4 year par call - looks very flat to the 7.6% €27s trading at 7.8%/Z,OAS+480. If it can show a turnaround later this year, latter might be a good line to tackle.



Earnings call ongoing here.
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