Practice values buck trend

Published On: 12-02-2010

While the unpredictability of the financial markets has undoubtedly had an impact on practice sales, goodwill values continued to climb overall in the first 10 months of 2009.

This good news for practice owners is from the latest survey of dental practice valuations and deals produced by the National Association of Specialist Dental Accountants.

The headline figures from NASDA’s survey show that average goodwill valuations as a percentage of turnover during the first three quarters of 2009 was 94 per cent, while the percentage for actual deals done was slightly lower at 85 per cent.

Alan Suggett, of unw LLP, the NASDA member who undertakes the survey, comments: 'There was a dramatic drop in sale values last spring yet average practice goodwill values actually increased during 2009. This is odd given that the attitude of banks towards lending is tightening.

Ajay Patel of Ajay Associates in north London has been particularly busy on behalf of his clients. He commented: 'In the south east, demand for practices is still outstripping supply. One of my clients is proceeding with a sale based around a 2006 valuation, despite falling income. His purchaser is happy to proceed, despite this. Prices are definitely remaining solid.'


[Back]