Shares in Babcock tumbled 12% on Wednesday morning when markets opened.

The defence contractor revealed a one-off £120 million hit to reshape its oil and gas business.

Pre-tax profits fell to £65.1 million – down by almost two-thirds. Revenue in the group fell by 2.7% to £2.25 billion.

If the one-off hit is discounted, profits in the group grew by 2.5% to £245.5 million.

Chief executive Archie Bethel said: “We had a solid first half with underlying results in line with our expectations and we have confirmed guidance for the full year. We are taking decisive actions to further strengthen the group which will deliver benefits next year and beyond.”

“We are taking actions necessary to further improve the quality of our earnings and our returns to shareholders. That is why we are exiting low-margin businesses, restructuring in areas and combating the overcapacity in our oil and gas helicopter services business. These actions, with minimal cash costs, will strengthen the business going forward.”

“We will continue to reduce net debt and focus on delivering value to our shareholders, partly through a growing and sustainable dividend. We have excellent opportunities both in the UK and internationally to build on our strengths and I am determined to build on them,” he added.

Shares in Babcock (LON: BAB) are currently trading down 8.38% (0934GMT).