Ryan Hotels has reported a 10 per cent rise in profits to €4.1 million (£3.23 million) and says it is making progress in implementing a strategic plan to realise greater value for shareholders.

The group is in talks to buy up to two new city-centre hotels in the UK and could use cash raised from the development of prime landbanks in Dublin and Limerick to fund its UK expansion, according to chief executive Mr Patrick Coyle.

Ryan has five acres attached to its Royal Marine Hotel in Dun Laoghaire and has drawn up plans to create a mixed development of apartments, retail and office units there. A three-acre site at Limerick is also earmarked for residential development and the hotel group is talking to property developers before finalising its next move.

Earnings per share increased by 4 per cent to 0.047 cents while shareholders will receive a 10 per cent rise in the interim dividend to 0.01257 cents. Turnover rose by 25 per cent to €26.3 million in the six months to the end of July with the group reporting disappointing growth at its hotels in Galway and Killarney. Mr Coyle said achieving growth at these two hotels has been a bit of a struggle mainly because of the shift away from the traditional two-week family breaks to a higher incidence of short breaks. During the 12 months, Ryan has been refurbishing the Metropole Hotel in Cork city and redeveloping its Hyde Park Hotel in London which it purchased last year.

Costs were also higher, with staff payroll costs up by 9 per cent in the six months as well as increases in the price of food and energy costs, Mr Coyle said.

Against this, though, the hotel is benefiting from continued buoyancy in the higher-margin corporate market and conferences. Mr Coyle said trading in the second half is strong and the group is on course to deliver double-digit growth by year-end.