Profits at Jardine Lloyd Thompson (JLT) were up 18% to £84.3m for 2001 compared to £71.4m for the year before, the broker reported this week.

The figure, before tax and exceptional items, reflected acquisitions, new business and current hard market conditions. Analysts' predictions had ranged between £82m and £85.9m.

The country's fifth largest broker, with about 2% of the global broking market, said turnover rose by 22% to £349.7m from £287.3m in 2000.

The lion's share of the growth came from operations in Europe, including the UK, where revenue grew to £229.9m in 2001 from £175.5m in 2000.

The rate of growth for profits failed to match that pace, rising to £65.7m in 2001 from £64.5m in 2000.

Chief executive Steve McGill said the growth would continue and predicted the hard market would last for at least two years.

The company makes more of its money from fees rather than commissions, but McGill said it expected to do well from the market conditions.

He argued that despite its ambitions, JLT would continue to benefit from its `small is beautiful' appeal when compared to its larger competitors.

The world's largest brokers, Marsh and Aon, controlled about 57% of the global market, he said.

"Essentially our approach is to have an alternative approach to the giant global brokers," he said.

"The fact that our senior management are out in the market doing the deals adds enormous value."

The company's UK pension scheme has a £72.4m pre-tax shortfall from its liabilities under a new type of accounting rules for pensions called FRS 17, which come into effect next year.

Finance director George Stuart-Clarke said the sums produced a "very conservative" valuation.

If top-up payments were needed, they would be calculated over a period of years. Director John Hastings-Bass said JLT was more committed than most companies to maintaining its defined benefit pension scheme.

Stuart-Clarke said the cost of top-ups would have to be "very significant" before JLT chose an alternative. JLT's share price fell 2% to about 614p on Tuesday.