This week saw the release of the latest statistics from the NASDAL (National Association of Specialist Dental Accountants and Lawyers) Goodwill Survey. This survey covers the quarter ending October 31, 2022, and includes data on valuations as well as deals completed (i.e., practices bought or sold by NASDAL members’ clients in the period).
This quarter saw a market that continued to thrive, albeit with a big difference in valuations and what practice sales are actually completing at. Overall, goodwill values were up to 141 per cent as a percentage of gross fees - from 135 per cent.
NHS practices saw a bounce, with goodwill as a percentage of fee income up 20 per cent to 152 per cent from the previous quarter. Mixed practices were also on the up, with goodwill as a percentage of income up to 143 per cent from 126 per cent in the quarter ending July 31, 2022. Private practice values were on the slide though, with goodwill as a percentage of income at 135 per cent of gross fees - down from 147 per cent in the last quarter.
A market returning to normality
Mike Blenkharn, head of dental at UNW LLP who compiles the goodwill survey, said, “We have definitely seen more deals happening in this quarter than the previous three or four. I see this trend continuing, and it is a sign the market is returning to more normal times. Although there was an NHS bounce, the number of sales was low compared to private and mixed practices. I would want to see further data before I came to any firm conclusions.”
Johnny Minford, principal of Minford Chartered Accountants and NASDAL media officer, remarked, “The practice sales market is still healthy, but in my experience, I am now seeing a number of practices ‘sticking’ on the market for longer than one might expect. They are perfectly healthy from a financial perspective but perhaps the appetite of buyers, geography or other factors are at play here.”
The goodwill figures are collated from accountant and lawyer members of NASDAL in order to give a useful guide to the practice sales market. These figures relate to the quarter ending October 31, 2022.
NASDAL reminds all that, as with any averages, these statistics should be treated as a guideline