Dublin-based CNG Travel, which returned to profit in the first half of the year, is seeking to expand its business through acquisitions in other US cities.

Speaking after the release of the company's results yesterday, chief executive PJ King said that, while no acquisitions had yet been identified, this was the only way the firm was going to grow.

"We are already one of the largest independent players in the New York market and the potential for organic growth is modest," he said.

However, considerable consolidation has been taking place in the US travel market recently, with the number of individual companies falling by 14,000 to 21,000 since 1995. According to Mr King, this consolidation is expected to continue and, as a result, there is plenty of potential for growth through acquisition.

Since September last year when it sold its online hotel booking business, Places to Stay, for $2.5 million, CNG's only operation has been its US business, Tzell Travel. That unit reported earnings before interest, depreciation, tax and amortisation of $4.7 million (€3.7 million) in the six months to the end of June, down from $5.1 million in the year-earlier period.

Total net profit meanwhile was $227,102, compared with a loss of $22.3 million a year earlier. Operating profit from continuing operations was $2.5 million, compared with a loss of $1 million, while turnover on the same basis was up slightly at $23.5 million.

Mr King welcomed the performance, saying times had been challenging but that it was now good to be able to report a profit to shareholders. The shares, which are listed on London's AIM, fell more than 3 per cent.

In July CNG agreed a $20 million debt facility with Merrill Lynch, of which $8 million has been earmarked for acquisitions, Mr King said.