Buy-Siders Await Evoke Full FY’25 Results, Update on Strategic Review as LME Concerns Cloud Asset Disposal Expectations; Recent EU Ruling on Class Action Claims Could Pressurize Liquidity

Buy-siders are gearing up for Evoke’s full 2025 results as they expect the U.K.-based online and high-street gaming operator to concurrently provide an update on the impact on earnings from the U.K. budget’s higher taxes as well as on the strategic review it launched in December, with expectations of asset disposals increasingly clouded by liability management exercise, or LME, concerns, sources told Octus. A recent European ruling that claims for losses resulting from illegal online gambling are governed by the law of the player’s member state of residence could also have an impact on the group, pressurizing liquidity if Evoke ends up having to compensate the claimants, sources said.

Evoke said last week that its full 2025 earnings will be published on April 29, later than market expectations for a release this week, adding that it anticipates FY’25 revenue and adjusted EBITDA to be in line with the trading update provided on Jan. 27. It also noted that its first-quarter 2026 has started positively with current trading being in line with the board’s expectations.

Evoke’s €450 million senior secured floating-rate notes due July 2028 are quoted at around 95, yielding about 10.44%, according to IHS Markit Price Viewer. The £400 million senior secured notes due 2030 and the €600 million SSNs due 2031, issued in September last year, are indicated at around 93 and 89, for a yield of 12.9% and 10.7%, respectively. The bonds have recovered some of the losses they experienced following the publication on Nov. 26, 2025, of the latest U.K. budget, which increased remote gaming duty to 40% from 21% previously. The recovery coincided with rumors circulating related to the disposal of the group’s Italian Online Gaming division.

In response to the new budget, Evoke withdrew its medium-term financial targets, waiting to see the full impact of the higher taxes. A few days later, on Dec. 10, the company said it had initiated a strategic review of its options to maximize shareholder value and appointed Morgan Stanley & Co. International plc and Rothschild & Co. as joint financial advisors to the board for the process. Alvarez & Marsal is also assisting the company on the process, according to sources.

When announcing the date of the full-year results release last week, the company noted that the strategic review remains ongoing, including discussions relating to a potential sale of the group, or some of the group’s assets and/or business units, adding that a further update will be provided as and when appropriate.

The price of the notes has been relatively stable in recent weeks and existing investors have been mostly sticking to the juicy yield on offer, with buy-siders particularly constructive on the short-dated bonds versus the long-dated ones in anticipation of a par repayment from asset disposals.

When launching the strategic review the company did not provide specific details, but the market has been focusing on the potential disposal of the Italian division, considered to be one of Evoke’s best assets, with Italian peer Lottomatica tipped as a natural buyer, sources noted. Asset disposals may however be insufficient to cover the whole of the 2028 debt maturities, which include a $575 million term loan B due July 2028 in addition to the FRNs. Sources estimated that the Italian division could be worth up to £500 million, in line with Octus recovery analysis’ midpoint expectations of around £477 million.

Some sources also raised concerns that Evoke may seek to drop down the asset first before moving ahead with a sale, therefore taking value away from creditors. Worries were exacerbated by some recent transactions carried out by the company that penalized some investors, such as changing the tax regime from Gibraltar to the U.K. and securing consent from creditors via a snooze-you-lose clause, sources said. Given the absence of a tax treaty, Evoke did not have to gross up on the interest, which came at the expense of some of the creditors domiciled in Gibraltar.

Other sources, however, argued that since the company is listed, any aggressive move against creditors would be unlikely.

Octus’ legal analyst team has reviewed LME risks for the credit here, including asset disposal and drop-down capacity, calculating that the company has at least £549 million of capacity to transfer assets to or designate unrestricted subsidiaries under its bonds.

Some distressed funds are circling the credit in anticipation that the bonds may drop again when the company reports next or provides an update on the strategic review.

A sale of the Italian business would deprive Evoke of one of its best assets, which Octus’ recovery analysis concluded would be detrimental to holders of the longer-dated notes. It would also leave it to deal with the former William Hill high-street estate, which has proved to be a thorn in its side. At the end of 2024, the group operated 1,331 trading licensed betting offices. The segment accounted for approximately 28.8% of group revenue in FY’24. With gaming increasingly shifting online and the recent tax hikes, the company may be left with no choice but to shut some of the shops or restructure the estate via a company voluntary arrangement, Part 26A restructuring plan or scheme of arrangement, sources argued.

Additionally, the group’s latest accounts featured a legal and regulatory provision amounting to around £121.4 million as of June 30, 2025, mostly related to its gambling operations in Austria and Germany, which it operated out of its Malta entity. A summary table for the group’s historical provision breakdown is shown below:

A class action lawsuit was brought by players in those regions suing Evoke over losses, with the group’s CEO also reportedly named in a private criminal complaint filed in Vienna alleging unauthorized gambling operations in Austria.

While Evoke had felt comfortable that it would be protected from the losses through the Malta entity, a recent EU ruling stated that the damage sustained by the player is deemed to have occurred in the country in which that player resides, meaning that a player may, as a general rule, rely on the law of his or her country of residence when bringing an action to establish liability in tort or delict on the part of the directors of a foreign provider that does not hold the required licence.

The ruling opens the door for the claims going against Evoke, not just its Malta entity, and could also mean that more people come forward and join the claim. If the claim becomes payable, this could further strain the group’s liquidity, sources said. As of Sept. 30, 2025, its cash and equivalents stood at £121 million.

When acknowledging the new U.K. budget, Evoke anticipated that tax duty costs would rise by £125 million to £135 million annually once implemented in 2027, with about £80 million in pre-mitigation impact in 2026, and added it expects to be able to mitigate about 50% of the impact of the taxes over the medium term through supplier savings, reduced marketing, retail store closures, operating cost savings and potential changes to the customer proposition. Octus reviewed the effects of the measures on Evoke’s earnings in an analysis here.