Private dental practices in the UK have been in the doldrums but show signs of picking up, according to the NASDAL (National Association of Specialist Dental Accountants) quarterly goodwill survey.
Speaking at the annual NASDAL press conference, Alan Suggett, specialist dental accountant and a partner in UNW LLP, said that the survey showed that there was an increase in the value of mixed and private practices at the same time as a decrease in the value of an NHS practice.
Private practices were sold for an average goodwill value of 90% of turnover so are still less attractive to purchasers than mixed or NHS practices – 134% and 128% respectively – but this figure was 2% higher than in the previous quarter and 13% higher than in April 2014. Meanwhile, the value of an NHS practice was significantly lower than in the previous quarters.
Deals on private practices were in a range between 53-134% of turnover whereas the range for an NHS practice was between 45% and 229% and for a mixed practice between 96%-195%. Valuations prepared by professional valuers were, on average broadly similar to the agreed sale price, with the exception of mixed practices which generally fetch more than predicted. The average valuation figure for a mixed practice was 104% of turnover while actual sale transactions were 20% higher.
Alan said it was still apparent that there was a feeding frenzy for dental practices of all kinds in the South East – which he dubbed ‘London area lunacy’. Alan collects the figures from accountant and lawyer members of NASDAL on a quarterly basis in order to chart the fortunes of dental practices. The figures announced are for the quarter ending January 31st 2015.