Ladbrokes is edging closer to a £2.7bn merger with Gala Coral Reuters

Ladbrokes has reported a strong increase in revenues for the third quarter despite incurring losses at racing festivals.

Revenue increased 12.1% from the same period a year ago in the three months to 30 September period — the fourth straight quarter of revenue growth.

UK retail revenue was up 1.9%, even though over-the-counter staking was down by 4.3%. Digital revenues were up by nearly half from the same period a year earlier.

"Our margin has been resilient, benefitting from our strategy of focusing on the recreational customer," Ladbrokes chief executive Jim Mullen said.

"This margin has been in spite of loss-making racing festivals at Goodwood and York.

"However, we did enjoy a strong end to the Euros and a stuttering start to the season for Manchester United and Barcelona has been in our favour.

"With the Melbourne Cup, an action-packed Boxing Day, the return of the National Hunt season and an intense programme of top level football to come, there remain significant opportunities and risks ahead," Mullen added.

Ladbrokes has been pursuing a £2.7bn merger with Gala Coral – a deal which could create the largest high street retailer in Britain.