Wellington, May 28 NZPA - Fisher & Paykel Appliances has knocked $14.7 million before tax off the carrying value of its Elba brand as part of changes to its distribution strategy.

The reduction was part of second half impairments of $25.5m which contributed to the group's loss after tax of $918,000 for the six months to March.

Added to the first half net loss of $82.4m -- which included $54.4m in impairment losses and $21.7m in fair value adjustments -- it took the company's full year result to a loss after tax of $83.3m. That was an improvement on the $95.3m loss for the previous year.

Publishing its full year results today, F&P Appliances said business had recovered in the second half of the latest year, even as difficult trading conditions continued in the United States.

Despite that improvement, second half revenue in the group's appliances business at $509.4m was lower than the $518.5m in the first half, although the finance business lifted revenue in the second six months to $70.2m from $66m in the first half.

Full year group revenue of $1.16 billion was 15.1 percent down on the year before.

Normalised group profit after tax rose to $18.8m in the second half, compared to a loss of $847,000 in the first half.

The full year normalised loss after tax of $18m was a little more than half the $33.8m for the year before.

F&P Appliances said improvements in the second half were driven by financial benefits from its global manufacturing strategy and market share gains in Australia.

Normalised operating profit before interest and tax for the appliances business for the second half of the year was $23.7m, compared to $5.7m for the first half.

With the company's global manufacturing strategy now complete, one-off costs associated with the factory relocations amounted to about $400,000 in the second half compared to $15m before tax for the first half.

Among one-off items for the year were redundancy costs of $8.3m before tax, debt restructuring costs of $11.1m before tax, and profit on the sale of land and buildings of $3.9m before tax.

Managing director and chief executive Stuart Broadhurst said the year had been difficult.

Challenges and distractions associated with shifting manufacturing locations were now behind the company, which was committed to building on recent gains, executing growth opportunities and developing products.

Demand conditions were expected to remain fragile, with competitor activity expected to be intense during the 2011 financial year, Mr Broadhurst said.

F&P Appliances was well positioned to benefit from revenue growth opportunities including expanding US distribution into Sears and Lowe's, distributing Haier products in New Zealand and Australia and the launch of the F&P brand in China.

Benefits of a lower manufacturing cost base were likely to be partially offset by competitor activity, rising commodity prices, increasing sea freight charges and lease costs. Labour costs would also rise following the removal of a 5 percent salary reduction for salaried employees.

The Finance business was expected to remain resilient despite soft retail conditions in New Zealand, although any increase in interest rates would put pressure on earnings.