FTSE 100 cash pile swells to £166bn
UK biggest companies fearful of splashing the cash, as they defend against tough market and economic conditions
THE UK’s largest companies are holding onto a £166bn cash pile – up £42.2bn since the financial crisis began in 2008.
Research by Capita Asset Services has found a sharp increase in cash and cash equivalents over the past five years, with the net cash position even higher – to £73.9bn from £12.2bn over the same period.
Nearly £20bn in short-term debt has been paid down since 2008, but long-term debt has increased by 11%.
Oil and gas producers account for a third of the cash pile, with 17 sectors doubling their cash positions and 13 seeing a decrease by an average of 26%.
Justin Damer, commercial director of Capita Asset Services, said: “Companies re-engineered their balance sheets to a more defensive structure as the recession bit, paying off debt and stockpiling cash, diverting the funds from business investment, acquisitions or dividends.
“But they have continued to hoard cash even as the economy has gone up through the gears, and this will prove unpopular with investors, who resent companies sitting on huge cash piles earning low returns.”