Paddy Power Betfair raises profit guidance on sterling, merger

DUBLIN (Reuters) - Paddy Power Betfair (PPB.I) (PPB.L) increased its full-year profit forecast on Friday, citing a boost in the sterling value of its euro revenue, this year's merger and favourable sporting results.

The gambling company said on Friday it expects core earnings (EBITDA) for the full year of 390 million to 405 million pounds, up from a previous guidance of between 365 million and 385 million.

It expected synergies from the merger of Paddy Power and Betfair to be 35 million pounds rather than 30 million in 2016 and it reported a 28 million pound benefit from the translation of non-UK revenue due to the weakness of the British pound.

A strong conclusion to the Euro 2016 football tournament generated 16 million pounds of revenues across the group in July, it said.

Online betting exchange Betfair and Paddy Power, which has a chain of shops as well as an online business, completed their 6 billion pound ($7.5 billion) merger in February, which it now believes will bring 65 million pounds of synergies.

The group reported EBITDA of 113 million pounds in the three months to the end of September, up 53 percent from the same period last year. Revenues of 404 million were up 25 percent compared to a year ago.

The company's shares added 4 percent to 100 pounds by 0805 GMT on Friday.

Irish stockbrokers Davy praised the performance as "not too shabby" and said it expected the company's share price to start to catch up with rivals which had outperformed it so far this year. It reiterated its price target of 111 pounds.

(Reporting by Conor Humphries; editing by Jason Neely/Keith Weir)