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July 28 (Reuters) - British set-top box maker Pace Plc said it expected full-year profit and cash flow to exceed previous guidance, driven by new product launches and contract wins.
Pace's shares rose as much as 3.5 percent in early trading on Monday, making the stock one of the top percentage gainers in the FTSE Midcap Index.
The company, whose customers include Sky Deutschland AG , AT&T Inc, Comcast Corp and DirecTV , said its operating margin for 2014 was expected to be no less than 8.5 percent, a rise from 7.8 percent in 2013.
Cash flow was projected at more than $200 million, an increase from the previous estimate of more than $185 million.
The company reiterated its full-year revenue guidance of about $2.7 billion, compared with $2.47 in 2013.
New contracts in the half year included Sky Italia and Brazil's Oi SA, Pace said.
The company also said stronger-than-anticipated demand for network products would drive revenue and profit growth in the second half of the year.
Pace, which acquired U.S.-based network gear maker Aurora Networks Inc last October for $310 million, said underlying demand for Aurora products was well ahead of expectations with "record" orders.
The Yorkshire-based company's revenue fell 13.6 percent to $1.14 billion in the first half ended June 30, while gross profit rose 5.4 percent to $245.8 million.
The company got more than half its revenue from North America in 2013.
Pace announced an interim dividend of 2.25 cents per share, up from 1.83 cents a year earlier.
The company's share were up 1.4 percent at 373.7 pence at 0725 GMT on the London Stock Exchange.
(Reporting by Noor Zainab Hussain; Editing by Ted Kerr)