Swan, which was formed when the old Higgs and Hill sold its construction business two years ago, also announced pre-tax profits for 1998 down 32 per cent to pounds 3.1 million.
John Theakston, group chief executive, said Swan will pay back pounds 15m to shareholders over the next 12-18 months. Swan will also divert pounds 50m of capital in the next three years from its property development side to housebuilding, mostly in the South of England. This will nearly double the total capital devoted to housebuilding to about pounds 90m.
Mr Theakston acknowledged the market's unhappy reaction but pointed out that the shares had stood at around 40p before the multiple bid approaches earlier in the year, which pushed the price up to the mid-70s. The unsolicited offers had come from both the property and housebuilding sectors, Mr Theakston said. He added: "The board felt we could realise shareholder value better by pursuing our new strategy.
"We decided that property development and housebuilding together are not easy for investors to value, and that concentrating on housebuilding will make things more transparent," the chief executive said.
"We doubled housebuilding profits last year and our operating margins in that division are 14 per cent, which is good by industry standards."
Last year Swan's turnover slipped to pounds 76.4 m from pounds 88.4m the previous year. Swan proposed a final dividend of 1.8p, making a total of 3p, up 9 per cent.