EUROPE – Watson Wyatt LLP, the UK-based consulting firm, says it is still looking for acquisitions - in a market where it faces “opportunities and threats”.

“While growth of the business has been organic during the last year, we continue to look for suitable opportunities for expansion by acquisition,” the firm said in its 2004 annual review. It made an almost identical statement in its 2003 annual review.

“Watson Wyatt faces opportunities and threats in many aspects of its business,” said managing partner Babloo Ramamurthy in the new report. Ramamurthy took over as managing partner from Alan Whalley, who went to US-based sister firm Watson Wyatt & Co., earlier this year.

“We are seeing greater regulatory scrutiny and challenge as well as strong competition in our established markets from existing competitors and new players,” Ramamurthy added. “However, I strongly believe the firm is well placed to face up to those challenges and take advantage of the many opportunities available to us.”

Profit for the financial year before members’ remuneration and profit share rose to 68 million pounds (102.9 million euros), from 59 million pounds in the previous year. Turnover was up eight percent at 242 million pounds.

“But demand for our services has not been uniformly strong,” Ramamurthy said. “A difficult trading environment for our human resource services and a review of our strategy led us to focus our services on reward consulting.” He said this “tighter focus” was already reaping rewards.

The average partner’s remuneration, excluding the highest paid member, was 330,000 pounds – up from 314,000 pounds a year before.

US-based Watson Wyatt & Co. will report its fourth quarter earnings on August 12.