Ladbrokes horse betting
Ladbrokes will hold the majority stake in the newly merged companyReuters

Shares in Ladbrokes jumped almost 5% early on Thursday (21 April), after the bookmaker revealed a sharp increase in first-quarter revenue, despite admitting it had suffered the worst Cheltenham horse racing festival in living memory.

In March, British bookmakers nursed collective losses to the tune of £60m ($86.1m, €76.2m) as a number of favourites repeatedly stormed to victory during the four-day festival extravaganza at Cheltenham.

"At Cheltenham we were reminded of the intense competition with offers and pricing at levels which, in our view, abandoned bookmaking principles," said group chief executive Jim Mullen.

"We competed hard but refused to pursue unsustainable strategies and our stance remains that we will compete where we know we can get the right returns from the right customers."

Mullen added the heavy losses suffered at Cheltenham took the shine off an otherwise positive set of first-quarter results, which saw the FTSE 250 company post a 10.6% year-on-year increase in total revenue in the three months to 31 March.

European retail net revenue rose 6.5% from the corresponding period a year earlier, while digital net revenue jumped 36.5% year-on-year on the back of online games' increasing popularity.

"We see plenty of evidence that indicates our plan is working but we are still early in our turnaround strategy and our priority remains on continued growth in our recreational customer base," Mullen added.

The group added sports betting net revenue rose 59% year-on-year, as it clinched its ninth consecutive quarter of year-on-year growth in sports. The sheer unpredictability of the Premier League season, with Leicester City and Tottenham Hotspur going head-to-head for the title, has given bookmakers a shot in the arm, given none of the pre-season favourites a chance to lift the trophy next month.

However, so long were the odds on Leicester, who escaped relegation in the final game of the campaign last season, winning the title that Ladbrokes faces a liability of £3m if Claudio Ranieri's men do go on to succeed Chelsea as Premier League champions.

In 2015, Ladbrokes agreed a £2.2bn merger with rival Gala Coral, although the deal is currently under investigation by the UK's competition regulator, with a ruling expected next month.