Dental Goodwill Defies Economic Gloom
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- Published: Wednesday, 12 February 2025 10:26
- Written by Peter Ingle
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There are daily predictions about the arrival of a toxic mix of inflation and a stagnant economy, as well as further tax rises. Coupled with global instability the outlook for the UK economy is at best, uncertain.
Against this, the value of the pound against the euro is near a five year high and the FTSE is at record levels. Headline figures from a newly published survey suggest that we can add dental goodwill values to the list of economic positives.
Releasing the latest statistics from their quarterly Goodwill Survey, NASDAL (National Association of Specialist Dental Accountants and Lawyers) have described, “a buoyant market.” The survey covers the quarter ending 31st October 2024 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 31st October 2024 saw a substantial rise in goodwill values across the board. Overall, goodwill values were at 153% as a percentage of gross fees - an impressive increase on the 113% of the previous quarter. Mixed practice goodwill values, which had struggled in recent surveys, rose from 107% as a percentage of gross fees to 154%. Private practices were not left out, seeing an increase from 111% as a percentage of gross fees to 143%. And despite the lack of movement on a new contract and reports of continuing pressure on viability, NHS goodwill values were up to 175% of gross fees - up from 129% in the previous quarter.
Mike Blenkharn, Partner and Head of Dental at UNW LLP, who compile the goodwill survey, said: “These figures certainly do point towards the return of a buoyant market. The figure of 153% as a percentage of gross fees is strong and I may expect the market to fall back a little from this in the next quarter.” He went on to sound a note of caution, pointing out that there is a time lag in dental practice sales data of around 9-12 months. As a result the survey numbers reflect activity in 2023 and early 2024, when there was a great deal of activity. He concluded, “I believe that the market will stay strong if not quite at these heights.”
Johnny Minford, Commercial and Development Director, DJH Mitten Clarke and NASDAL Media Officer, added, “We have definitely seen a bounce which these figures reflect but I agree with Mike that the time lag means these are reflecting deals commenced twelve months ago. Since then we have had an increase in interest rates, an election and a knock on general business confidence. We may see a flurry of activity before 31st March 2025 to avoid the tax changes.”
So perhaps not quite the good news for the Chancellor or profession that might be suggested by a first glance at the figures.
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