British blue chips' cash holdings up by a third since 2008 -Capita

LONDON, Sept 16 (Reuters) - Britain's top companies haveboosted cash holdings by more than a third in the past fiveyears, opening the door to future acquisitions or bumpershareholder returns, research showed on Monday.

Gross cash holdings of FTSE 100 companies have risen by 42.2billion pounds ($66.78 billion) since 2008, according toresearch by Capita Asset Services.

That leaves companies with a collective 166 billion poundson their balance sheets, which would be enough cash to buy morethan 8.5 percent of the FTSE 100, or more than triple 2013'sforecast dividend payout for the index.

While unlikely to be returned to shareholders in one fellswoop, the cash, accumulated and held onto in the fall-out fromthe financial crisis, could find its way back to productiveusage as growth returns to the economy.

Following the crisis in 2008, companies diverted cashusually returned to investors or used for new businessinvestments in order to shore up their balance sheets.

"The credit crunch was a huge shock (and) companiesre-engineered their balance sheets to a more defensive structureas the recession bit, paying off debt and stockpiling cash ...With the economy back on its feet, the key question is whatcompanies will do with their cash reserves," Justin Damer,commercial director of Capita Asset Services, said.

"There is a delicate balance between balance sheetconservatism and maximising shareholder returns. I just wonderwhether we might have reached a tipping point."

Capita Asset Services carried out the study by manuallyanalysing 200 individual balance sheets.

The top sector for cash accumulation has been oil and gas,which has stockpiled 30.4 billion pounds in extra cash since2008, while miners and mobile telecoms have both accumulated inexcess of 7 billion pounds each.

Wireless telecoms are expected to increase dividend yieldsnext year by 20 basis points compared to this year, ThomsonReuters StarMine SmartEstimates show, putting their payoutssecond only to traditionally high-yielding utilities.

Investment in capital expenditure is another option. Forinstance, British telecoms group Vodafone is looking toboost capex by 300 million pounds in the current financial year,according to the report.