UPDATE 1-Diploma FY profit falls, sees challenging 2010

* FY adj pretax profit from cont ops falls to 25.5 mln stg

* FY rev from cont ops up 2 pct at 160 mln stg

* Final div up 6 pct at 5.3 pence

* Contracts for sale of Anachem for up to 8.6 mln stg

(Adds details)

Nov 16 (Reuters) - Diploma Plc's (DPLM.L) full-year adjusted pretax profit from continuing operations fell 5 percent and the technical products supplier said it expects 2010 to continue to be challenging and is not planning for early recovery in trading.

However, Diploma raised its final dividend by 6 percent to 5.3 pence and said it was well positioned to benefit from any market recovery and was confident in the strength of its cash flow.

For the year ended Sept. 30, the company posted adjusted pretax profit from continuing operations of 25.5 million pounds ($42.60 million) compared with 26.8 million pounds a year ago.

Cash flows from continuing operations were up 33 percent at 23.5 million pounds.