NASDAL goodwill survey - on the slide?

04 November 2023

During the first week of October, the latest statistics from NASDAL have been released (National Association of Specialist Dental Accountants and Lawyers) in its quarterly Goodwill Survey. This survey covers the quarter ending 31st July 2023 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 ending July 31, 2023, saw a market that is steady but perhaps seeing signs of a slowdown. Goodwill values were at 145 per cent as a percentage of gross fees - similar to the 151 per cent of the previous quarter. Private practice values were at 150 per cent as a percentage of gross fees - up slightly from 145 per cent in the quarter ending April 30, 2023. However, mixed practices saw quite a drop compared to the previous quarter – 132 per cent as a percentage of gross fees compared with 160 per cent previously.

Mike Blenkharn, partner and head of dental at UNW LLP, who compiled the goodwill survey commented, “I would certainly say that deals are down compared with 2022. We have entered a quieter period of the practice sales market. Indeed, our last three goodwill surveys have all shown a downward trend. I believe that this is down to a number of factors - the biggest being the increased interest rates and not just in regard to the cost of business borrowing but also that of personal borrowing, in particular mortgages.

“There is still interest in those NHS practices with high UDA rates, and NHS values are likely to remain steady above a certain baseline level. And, as ever, good practices sell quickly!”

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, 2023.

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