Goodwill values – uncertainty creeps in

Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, explained, “This quarter’s figures show the average of  goodwill as a percentage of fee income on those practices actually sold continue to drop back and there is a great discrepancy between valuations and deals.  I reported in the last survey that practice sales agents had told me that there was still huge appetite for practices and the withdrawal of {my}dentist would have little or no effect on the market.

“There seemed to be a general perception that the corporates, including {my}dentist, were buying up every practice across the country. Whilst this wasn’t true and {my}dentist was only responsible for a small percentage of sales, it does seem that their withdrawal may have lead to a more general loss of confidence. With a time lag between valuations and deals done, it will be interesting to see if the quarters to come will reflect the optimism of these high valuations when it comes to actually signing on the dotted line.”