By Raechel Thankam Job and Pushkala Aripaka
(Reuters) -British betting and gaming firm Evoke on Wednesday said its revenue growth rate would be slower in the first quarter than it had forecast for the full year, sending its shares tumbling even as it beat profit expectations for last year.
Evoke forecast low single-digit percentage growth in first-quarter revenue, while reiterating expectations for annual revenue to grow 5%-9%, as it grapples with short-term hurdles related to regulatory curbs on problem gambling and some anticipated revenues not coming in.
The company’s shares had fallen as much as 18.8% by 0852 GMT and were the top loser on Britain’s small-cap index.
“We would expect some concerns on Evoke’s ability to fulfil its guidance, particularly given a rather soft Q1,” JPMorgan analysts said in a note.
Britain is among markets that have been cracking down on betting companies in a bid to rein in harmful gambling habits. In November the UK government capped the amount gamblers could stake on online slot games, which are associated with binge play.
Still, Evoke expects first-quarter core profit to rise by 18 million pounds to 28 million pounds ($23.3 million to $36.2 million) from the year before, supported by cost-cutting measures under which it has identified another 15 million pounds to 25 million pounds in savings for 2025.
Under CEO Per Widerstrom, Evoke has initiated a turnaround strategy for its business which has included changing its name from 888 Holdings and doubling down on its focus on its core markets of the UK, Italy, Spain, Denmark and Romania.
“We remain highly confident in our full year expectations … in addition to driving further margin expansion as a result of our more efficient operating model,” Widerstrom said in a statement.
Evoke’s 2024 adjusted core profit of 312.5 million pounds beat analysts’ average estimate of 294 million pounds, according to a company-compiled poll.
Bookmakers will also be keenly watching updates from British finance minister Rachel Reeves’ Spring budget on Wednesday. Reeves left the sector’s taxes unchanged in October’s budget, in a relief for gambling firms following reports of 3 billion pounds worth of tax hikes.
($1 = 0.7740 pounds)
(Reporting by Raechel Thankam Job and Pushkala Aripaka in Bengaluru; Editing by Mrigank Dhaniwala, Jan Harvey and Joe Bavier)
