SOURCE: Reuters

(London, UK) — Online gaming group Sportingbet (SBT.L: Quote, Profile , Research) reported a 54 percent increase in second quarter profit on Wednesday, boosting its shares, and said it had so far avoided conflict with French authorities.

The numbers excluded Sportingbet's former U.S. operations which it sold for $1 (50 pence) after its main market banned Internet gambling last October.

Sportingbet shares, which now trade for about a tenth of their value before the U.S. crackdown, jumped 13.6 percent to 48 pence by 12:35 p.m., valuing the group at around 207 million pounds.

The group said results from football, which accounts for 70 percent of its European operations, had worked in its favour this season and its third quarter had started well.

Analysts believe French authorities are looking to question about 20 online gaming firms after 888 Holdings (888.L: Quote, Profile , Research) said on Tuesday its former chief executive, John Anderson, had been asked to attend an interview.

France is viewed by online gaming executives as hostile to their business, and they fear a crackdown.

Chief Executive Andy McIver told reporters French authorities had not requested a meeting and less than 2 percent of Sportingbet's business comes from France. "We've never really targeted France," he said.

Including its former U.S. operations, Sportingbet reported a group operating loss of 243.9 million pounds in the six months to January 31, compared to a profit of 43.1 million a year earlier.

"Management has managed to successfully restructure the business and already taken 56 million of annualised costs out of the business," said analysts at Dresdner Kleinwort. They upgraded their 2008 earnings per share forecast by 30 percent to 4.2 pence.

Sportingbet also announced it had agreed to buy Turkish marketing partner Maslin Properties for 3.5 million pounds, plus a payment in shares dependent upon performance.

It also bought a further 40 percent of its Italian joint venture, taking its total holding to 90 percent, for 4.25 million euros.

"One of our concerns with Sportingbet moving forward, now that the U.S. business had to be sold, was its low levels of equity in its key European markets," said analyst Wayne Brown at Altium Securities.

"We are therefore pleased to see today the acquisition of assets of its Turkish marketing partner," he added.

Sportingbet's like-for-like operating profit was 2 million pounds in the second quarter to January 31, compared to 1.3 million a year earlier.