UK firms pay record $36 billion in second-quarter dividends

LONDON (Reuters) - UK companies paid a record 22.6 billion pounds ($35.50 billion) in dividends in the second quarter as many firms baulked at spending bumper cash piles on deal making or other forms of capital expenditure in the face of the global economic slowdown.

The quarter, which usually sees the biggest dividend payouts, was the sixth consecutive quarter of growth and took the half-year total to 41.4 billion pounds, a 21.3 percent gain on 2011 and the fastest period of growth since 2007, Capita Registrars said in a report.

As a result, the firm updated its expected full-year total for UK firms by 2 billion pounds to 78.3 billion.

Large special dividends by the likes of Old Mutual, GlaxoSmithKline and Antofagasta all boosted the quarterly total, although structural growth was also seen.

"Cash flow is still strong, yet corporate investment is very depressed. Dividends are one destination for the large cash surpluses that companies have accumulated as a result," Charles Cryer, chief executive of Capita Registrars said.

"Even without the record special payments, underlying dividend growth has surpassed our expectations with its strength.

Looking ahead, however, Cryer added he was more cautious about 2013 "mainly because it is hard to see the magnitude of special payments being repeated, leaving regular dividends to do the heavy lifting."

($1 = 0.6366 British pounds)

(Reporting by Simon Jessop. Editing by Jeremy Gaunt.)