First quarter revenue and profits surged at Paddy Power Betfair, after a series of bookmaker-friendly results boosted the performance of its sportsbook division.

In three months to 31 March, the FTSE 100-listed company reported a 23% year-on-year increase in revenue to £416m ($537m), although the rate of growth moderated to 15% on a constant currency basis, which included a £23m benefit from the translation of non-UK revenues due to the weakness of sterling.

Underlying earnings before interests, taxes, depreciation and amortisation were up 87% to £111m and underlying operating profit jumped 114% year-on-year to £91m, growing 117% on a constant currency basis.

The company attributed the sharp increase in revenue to a very successful quarter for its sports business, with sportsbook stakes 18% higher than in the corresponding period last year.

The group's sportsbook net revenue percentage was slightly behind the company's expectations in the quarter, but was up 1.3 percentage points year-on-year due to the impact of adverse sports results in 2016, most notably at the Cheltenham Festival.

Bookmakers endured their worst Cheltenham in history last year, losing approximately £60m over the four-day meeting, as favourites stormed home. However, at this year's festival, 19 of the 28 races were profitable compared with just 11 races in 2016.

"Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth," said group chief executive Breon Corcoran.

"Combined with the annualisation of merger-related cost savings and continued focus on operating efficiency, this resulted in a doubling of operating profits in the first quarter."

However, he warned that, since then, at high profile events such as the Grand National, Premier League football and the US Masters, results favoured customers, and overall gross win margins were weak in April.

Online revenue rose 15% year-on-year to £224m and 12% on constant currency basis, primarily driven by a 33% increase in sportsbook revenue, the company added. Sportsbook growth was driven by both improved sports results and 13% growth in online stakes – 9% excluding currency fluctuations – while net revenue margin improved by 1.3 percentage points to 6.7%.

Paddy Power Betfair's retail arm saw revenue increase by 23% to £82m, with like-for-like revenue growing by 16%, while the bookmaker's Australian business posted a 21% rise in revenue in local currency, driven by a 17% increase in total stakes.