Dental practice values have seen a sharp rise in the latest quarterly NASDAL goodwill survey.
Average goodwill dental practice valuations have now reached 151% of gross fees, a jump of 20% since the last quarter.
Deals actually done also jumped, reaching 143% of gross fees, up 8% since the last quarter.
‘It never fails to amaze me that such a high value is placed upon NHS practices.’ Alan Suggett, specialist dental accountant and partner in UNW LLP who compiles the goodwill survey, said.
‘Particularly in such challenging and uncertain times.
‘When Brexit finally arrives, the new much heralded reformed contract could obviously have massive implications for goodwill values.
‘However, investors still seem to be happy to pay a premium for what they consider a “safe” investment.’
NHS dental practice values
Growth comes from a sharp rise in NHS dental practice values, which saw average goodwill valuations 194% of gross fees.
This is a massive jump from the 149% of gross fees reported in the last quarter.
It also continues the huge growth this year, when NHS dental practice values were 118% of gross fees.
‘The dip reported in the last two NASDAL surveys really surprised me as this was not what Frank Taylor & Associates was seeing,’ Andy Acton, director at Frank Taylor & Associates, said.
‘The reported bounce back takes the goodwill levels back to where I’d expect them to be for this period.
‘Bringing the commentary right up to date we are seeing more activity in the last quarter of 2019 when compared to 2018.
‘I don’t see this picture changing much in 2020.’
Dentistry viewed as ‘low risk’
Mixed dental practices are also experiencing growth, with average goodwill dental practice values of 180% of gross fees.
This means the average goodwill for a mixed dental practice valuation has risen by 25% in the last quarter.
‘One of the most prominent recent trends is for private equity (PE) investors to acquire dental groups,’ Simon Hughes, director and head of medical at Christie & Co, said to Dentistry.co.uk earlier this year.
‘Dentistry is viewed as low risk compared to other sectors.
‘This is due to contracted income in the NHS sector and a buoyant private sector.
‘The general profile of UK dentistry is increasing.
‘While there are some shocking news stories from time to time in the press, awareness of the importance of good oral health is improving.’
