Following on from NASDAL’s previous quarterly goodwill survey, there seems to be a degree of consensus that the high prices achieved by some dental practices are more indicative of high demand than the profits that can be achieved.
Their latest report, up to 31st April 2015, has seen specialist dental accountant, Johnny Minford, and Alan Suggett, NASDAL member, agree that demand is the key driver. Furthermore, Alan suggested that the highest values are still being commanded by purely NHS practices, which is illogical given the uncertainty surrounding the reformed NHS contract, but does reflect the massive surplus of buyers versus sellers.
Private practice values also appear to be gaining ground. Alan indicated that the average goodwill value for a private practice was 99%, compared to 90% for the quarter ending January 2015 and 88% for the quarter ending October 2014.
In this regard, NHS practices continue to outstrip mixed and private practices. While mixed practices had a goodwill value of 104%, NHS practices could boast an average of 125% of turnover.
Chris Davies, a partner in law firm JCP Solicitors, has overseen many transactions in the recent quarter. He said: “There is no problem with funding here, banks are keen to lend with a few new banks on the scene showing interest such as Swedish Handelsbanken and HSBC.”
Alan Suggett added one grain of caution concerning these figures, however, as there were a number of transactions which varied significantly from the averages. These survey figures should, as a result, be read been seen as providing a rough guideline only.