LONDON (Reuters) - Increasing digital revenue and a strong start to the soccer season helped bookmaker Ladbrokes (L:LAD) report its strategy under new boss Jim Mullen was making progress, sending its shares sharply higher.
Ladbrokes, Britain's second-largest retail bookmaker by number of stores but long an underperformer online, is in the process of completing a 2.3 billion pound merger with Gala Coral, partly aimed at boosting its presence online.
While the company said on Thursday the merger was on track, it added there was no material news it could give on the regulatory process.
Instead investors focused on the company's strategy of developing its "multi-channel" offering, with third-quarter digital revenue up 6.4 percent, or 10.5 percent after stripping out the impact of the soccer World Cup last year.
That maintained a similar level of growth recorded in the first half, but mobile bets were up 69 percent by value, slightly ahead of the first half.
The statement helped soften the blow of a 57 percent fall in earnings before interest and tax to 14.3 million pounds, as expected, as Britain tightened regulation and ramped up taxation in the gambling sector.
"With sports betting at our core, we see customers responding well to our products, our value and to our recently launched multi-channel offer," said Mullen.
Ladbrokes said it had raised 1.35 billion pounds to finance the new betting group, which will seek to combine Ladbrokes' dominance of betting in physical stores with Coral's success in online.
"We think the results should be taken well by the market, particularly given the strong staking (betting) levels," UBS said in a note.
Ladbrokes shares were up 6.2 percent by 1004 GMT.
Mullen, formerly the group's digital boss, was named CEO in March with a brief to further boost the group's digital position. Three months later he announced the talks with Gala Coral.
($1 = 0.6466 pounds)