The company which owns Bradford's Midland Hotel expects to net £8.5 million from the sale of the hotel's basement to a developer who will transform it into a casino.

Peel Hotels has agreed a 25 year lease with Clermont Leisure.

The announcement comes as Peel Hotels posted its interim profit results for the six months ended August 26, which showed a 45 per cent boost in pre-tax profits to £755,226. The figures resulted in a basic earnings per share of 4.4 pence and an interim dividend of 2 pence.

The firm has also exchanged contracts on the £2 million sale of its Saleem Street site in Bradford which will be transformed into 99 apartments, office space and car parking.

Bosses say the sale of the land, alongside the disposal of its Avon Gorge Hotel, has left the firm with no debts.

Executive chairman Robert Peel said: "The net affect of our asset sales and lease acquisition, apart from significant capital gain from the former, will be to leave the company totally debt free going forward.

"There is still scope to improve the performance and market positioning of the eight hotels in the portfolio which will self fund capital improvements and deliver shareholders a progressive dividend policy."