Plugin has default CSS which has defined space between posts.
Maybe your theme has some style for classes that widget outputs too.
However, you can modify this CSS of create your own to prevent issue with updates in the future.
Pilot version of this plugin had layout as on screenshot, but current version has different layout. That means that heading is on the top of each post and below are thumbnail image and post excerpt.
On this URL is still active pilot version:
On this URL you can see how plugin looks like with default CSS with few changes on theme's CSS: