THB Grouphas remained upbeat about its future despite profits before tax falling year-on-year.

The group reported a pre-tax profit of £2.2m for the year ended 30 April 2005, down 41% on the previous year. However, turnover increased by 3% to £32.4m.

THB chief executive Vic Thompson said 2004 to 2005 had been a challenging year for the company, but that it had already dealt with many of the issues affecting its performance.

"With steps already taken and good brokerage volumes in the first two months' trading, the circumstances affecting 2005 appear to be behind us," he said.

Thompson blamed the deterioration of the US dollar, softening rates and the relative uncompetitiveness of the London market compared with US domestic insurers for the group's poor performance.

Last year THB rationalised its general commercial book by the sale of its Glasgow business and the proposed sale of its Leeds business. It is now concentrating provincial retail operations in Leamington and Nottingham, where it expects substantial growth this year, it said.