UPDATE 1-Lifted by new contracts, Playtech set to top forecasts

Thu Aug 28, 2014 5:02am EDT

(Adds current trading, M&A plans)

By Keith Weir

LONDON Aug 28 (Reuters) - Playtech said on Thursday that profit was likely to come in ahead of forecasts this year, with new contracts in Mexico, Britain and Italy underpinning optimism at the online gambling software company.

Playtech shares, which are listed in London, traded 7.7 percent higher at 714p by 0900 GMT, valuing the company at about 2 billion pounds.

Playtech, which provides software for sports betting and online casino and poker games, said core earnings rose 28 percent to 97.6 million euros ($128.9 million) in the six months to the end of June.

The company announced agreements with leading Mexican gambling group Caliente, British newspaper publisher Trinity Mirror and an unnamed major media brand in Italy.

"Management is confident of exceeding current market expectations for the full year," the company said in a statement, adding that revenues in the third quarter so far were 21 percent ahead of last year.

Chief Financial Officer Ron Hoffman told Reuters that first- half profit had beaten forecasts by nine percent and that gave a broad indication of the improved expectations for the year.

Analysts had been forecasting core profit (EBITDA) of 179.70 million euros for 2014, according to Reuters data.

Playtech is gaining the benefits of a partnership with British gambling company Ladbrokes which has been fully operational since the end of April.

It has also won a contract with Dutch company Holland Casino, anticipating regulation of the online gambling industry in the Netherlands which it expects to happen next year.

Playtech has a cash balance of 366 million euros and said it was looking at potential acquisitions in markets which are relaxing restrictions on online gambling.

Founder Teddy Sagi banked about 326 million pounds in March when he sold more than 15 percent of the company. The Israeli entrepreneur still owns a third of the business. ($1 = 0.7573 Euros) (Editing by David Clarke)

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