Broker Layton Blackham reported income growth of £3.3m, or 25%, during 2001.

New business and organic growth accounted for £2.5m of the increase.

Profit before tax, excluding amortisation costs associated with acquisitions, was £1.3m, up from £1.1m the previous year.

When amortisation costs associated with acquisitions are included, profit before tax was £136,038, up from a loss of £6m in 2000.

Marketing director Charles Whitfield said high amortisation costs - of £1.1m in 2001 - reflected acquisitions made last year. The company has made 16 acquisitions since 1997 with most in 2000.

The last acquisition was in December 2000 and the subsequent year had been a time of consolidation.

He said: "If 2001 was about consolidation, 2002 will see the impact of increased prices. There's a focus on retention rates, but we're ahead of budget for the first quarter and our strategy assumed general business price inflation of 15%.

"Looking into the future we still see acquisition opportunities, network franchise opportunities and tied agency opportunities.

"We are where we said we would be - and we're very pleased."

Layton Blackham would stick to its core business of commercial, corporate and property business with substantial interests in personal lines business and financial services.

The company has a £2.4m deficit in one of its pension schemes.

The defined benefit scheme, which is now closed to new members, contains shares, bonds, cash and other assets worth a total of £6.7m.

But its liabilities - the cost of the pension benefits it expects to pay - total £9.1m.

The deficit is a result of declining stockmarkets.

The company has started making a series of six-figure sums to bring the scheme's assets back into line with its projected liabilities.