NASDAL Goodwill Survey – further NHS practice woes

25 November 2022

The latest results from the NASDAL (National Association of Specialist Dental Accountants and Lawyers) Goodwill Survey statistics have been released. This survey covers the quarter ending July 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).

The quarter saw a mixed bag - goodwill down for NHS and mixed practices, but a slight increase for private practices. Overall, there was a decrease in goodwill as a percentage of fee income in the quarter across all types of practice – deals averaged 135 per cent of gross fees – down from 143 per cent in the quarter to April 30, 2022.

NHS practices fell back to 132 per cent goodwill as a percentage of fee income in the quarter - a big drop from 178 per cent of gross fees in the previous quarter. Mixed practice goodwill values were also on the slide as they dropped to 119 per cent of gross fees (132 per cent in the previous quarter). Private practices saw a small increase, with goodwill at 140 per cent of gross fees – up from 124 per cent in the last quarter.

NHS practices less attractive?

Mike Blenkharn, head of dental at UNW LLP, who compiles the goodwill survey said, “In my view, this quarter is more indicative than the previous one. I feel that NHS practices are less attractive than they were twelve months for a number of reasons - recruitment of staff being one of the major ones. The right mixed practice can offer the benefits of both private and NHS.”

Johnny Minford, principal of Minford Chartered Accountants and NASDAL media officer added, “I think that the market will stabilise over the next twelve months. With a coming recession and lower consumer confidence, the NHS could be perceived as a safe haven. The value of a steady income is starting to be seen in the Goodwill Survey results, with mixed practices showing higher values than predominately private. NHSBSA are taking a hard line on clawback and abatement, so conversely this could lead to more NHS practices on the market.”

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 July 31, 2022.

NASDAL reminds all that, as with any averages, these statistics should be treated as a guideline only.