RE: Results1 May 2026 18:05
Some of the key points in the results that seemed troubling were:
(1) In the case of a sale of the Group, the Group's existing debt arrangements include change of control clauses such that the sale could trigger them to become immediately repayable, subject to the bondholders exercising their right to put.
(2) The auditor's report on the accounts for the year ended 31 December 2025 contains material uncertainties in respect of going concern in relation to the ability of the Group to achieve a significant improvement in profitability in order to be able to refinance its debt due in July 2028, before its revolving credit facility becomes due in January 2028.
(3) The Directors recognise that, based on discussions with its advisers, the ability to refinance the July 2028 debt in advance of January 2028 is dependent on the Group demonstrating a sustainable and materially improved level of profitability and cash generation, supported by the successful delivery of cost-saving initiatives and continued operational performance. Whilst the Directors have plans to achieve this improvement in profitability, achieving it represents a significant execution challenge and is subject to uncertainty.
(4) The Group has a highly leveraged capital structure, with total borrowings of approximately £1.8bn at 31 December 2025.Its principal borrowing facilities include a £200m revolving credit facility maturing in January 2028, two tranches of debt maturing in July 2028 (totalling £769m), with further fixed notes maturing in 2030 and 2031 (totalling £400m and £505m respectively). The terms of the revolving credit facility set out that it will become repayable in January 2028 if the majority of the July 2028 debt has not been refinanced by that date.
(5) In November 2025 the UK government announced significant increases in UK remote gaming duty that took effect from 1 April 2026, with a new online betting duty to be introduced from April 2027 at a higher rate than the existing duty. These duty increases are expected to have a material adverse impact on the Group's profitability and cash generation from April 2026, with initial estimates of this additional duty being £125m-135m per annum before mitigations.
(6) The changes in UK duties have created two material uncertainties, one in respect of the Group's ability to refinance its July 2028 debt prior to January 2028.
(7) Discussions with Bally's Intralot S.A. remain ongoing, but there can be no certainty that a firm offer will be made nor as to the terms on which any such offer might be made. A further announcement will be made when appropriate.
I feel fortunate to have sold out and made a profit of approximately £9k, I think I may have been naive in thinking Evoke could turn this around. The profit before interest and tax is impressive, £240m in the last year is fantastic but even after paying £184m this last year towards their debt, their net debt increased by another £75m.
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