Alan Suggett, specialist dental accountant and a partner in UNW LLP, speaking at the annual NASDAL press conference, 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 per cent of turnover so are still less attractive to purchasers than mixed or NHS practices – 134 per cent and 128 per cent respectively - but this figure was 2 per cent higher than in the previous quarter and 13 per cent 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 per cent of turnover whereas the range for an NHS practice was between 45 per cent and 229 per cent and for a mixed practice between 96-195 per cent.
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 per cent of turnover while actual sale transactions were 20 per cent 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 at the NASDAL press conference were for the quarter ending January 31, 2015.