The newly merged giant bookmaker Paddy Power Betfair has reported a 16 percent increase in revenue for the first quarter of the year. However, shares in the company dropped in the early morning trading in Dublin as the revenue turned out to be lower than expected.

Punters netted £20 million against the bookmaker in March during the Cheltenham horse racing Festival and this has impacted the Q1 results for the company. The revenue rise to £339 million fell short of the £352 million predicted by analysts at Davy, as well as the £341 million forecast by Goodbody Stockbrokers.

“At first glance, this morning’s release could cause alarm,” reported David Jennings, an analyst at Davy. “However, once the seasonal profit margin trends exhibited last year are considered, it becomes clearer that the group can still meet expectations for the year, albeit with profitability back-end-weighted once again.”

The company’s earnings before interest, tax, depreciation and amortisation (ebitda) rose 27 percent to £59 million and its operating profit increased 36 percent to £43 million. It saw particularly strong growth in Australia with sales up 25 percent to £58 million, while its US revenue increased 22 percent to £20 million.

Paddy Power Betfair declared strong performance across all divisions with retail revenue up 5 percent to £58 million and online sales increased by 17 percent to £195 million. Sportsbook revenue increased 17 percent to £135 million and gaming revenue rose by 17 percent to £60 million.

“All four of our brands – Paddy Power, Betfair, Sportsbet and TVG – continue to trade well in a highly competitive environment,” announced Breon Corcoran, chief executive of Paddy Power Betfair.

Paddy Power Betfair says they are pleased with the way the integration of the two businesses is progressing and its customers are beginning to benefit as it shares products.