LONDON, UK: The average value of dental practices that offer care to NHS patients increased in the three-month period ended 30 April, bucking a downward trend that saw the average goodwill value of NHS practices fall consecutively for three quarters last year.
According to the latest NASDAL (National Association of Specialist Dental Accountants and Lawyers) Goodwill Survey statistics, which measure the average value of the patient base of dental practices in relation to gross fees, NHS practices saw an average goodwill value of 149% in the first quarter of 2019. This was up around 26% on the goodwill value of 118% recorded in the previous quarter, but still short of the July 2018 high of 224%.
The NASDAL said mixed practices had also shown buoyancy, with a goodwill value of 146% of gross fees, up 38% on the previous quarter. First quarter sales at fully private practices were steady, with an average goodwill value of 120% of gross fees. Across all practice types, deals, which represent actual practice sales, were up 2%. Valuations, which the association said tend to be more volatile, also proved relatively stable at 131% of gross fees, up from 126% in the previous quarter.
Alan Suggett, who compiles the survey and is a specialist dental accountant and partner in accountancy firm UNW, said in a press release, “It is interesting to note that NHS practice values are back up—I wonder whether with Brexit/No Brexit looming, banks are looking for any kind of certainty that they can find.” He continued, “Anecdotally, I also hear that banks are keen on practices with a significant plan income—in uncertain times it is perhaps natural to cling on to any reassurance that one can find.
“There are still plenty of private equity-backed corporates paying big money if your practice is in the ‘right’ place,” Suggett pointed out. “However, if you are a single-handed practice with a small NHS contract value and low UDA [unit of dental activity] rate in Cumbria or Cornwall, I wouldn’t hold your breath.”
The goodwill survey figures are collated on a quarterly basis and the NASDAL emphasises that the average values should be treated as a guideline only.
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