Shares in Cobham were up on the FTSE 250 in afternoon trading after the defence company reported a rise in revenue and pre-tax profit in the year ended 31 December 2010.

Revenue increased one per cent in the period to £1.9 billion, while underlying pre-tax profit increased four per cent to £306 million. Statutory pre-tax profit fell from £245 million to £189 million.

Cobham said it would be raising its full year dividend 10 per cent to 6.00 pence per share.

Earlier this year Cobham was selected to provide aerial refuelling systems to the US Air Force KC-46A tanker aircraft.

Andy Stevens, Chief Executive Officer of Cobham, said, "We have delivered 5% underlying earnings growth in challenging markets. Good revenue growth in certain Strategic Business Units was masked by order slippages on significant defence and security programmes and some continuing softness in certain commercial markets. We have made encouraging progress on Excellence in Delivery and achieved cost savings which have contributed to earnings growth from flat Group revenue.

"We continue to see challenges in some of our markets and uncertainties as the Continuing Resolution impacts the funding of US Government spending. As a consequence, the rate of revenue growth in our Technology Divisions remains at the level experienced during 2010. We have configured the business with a prudent view of top line growth for the current year and have already accelerated integration plans to deliver £21m of cost savings in 2011.

"We continue to have strong long-term positions in attractive markets with superior growth and are focusing our technology investment and acquisition strategy in areas of customer priority. This approach, together with customer and cost benefits from our operational improvement plan, gives the Board confidence that the Group will continue to make progress over the medium term."

By 15:40 shares in Cobham were up 6.18 per cent on the FTSE 250 to 221.80 pence per share.