Goodwill bubble shows no sign of bursting
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- Published: Monday, 18 April 2016 07:36
- Written by News Editor
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Mixed and NHS Practice values continue to soar and the goodwill bubble certainly shows no sign of bursting at present as reported in the latest NASDAL (The National Association of Specialist Dental Accountants and Lawyers) goodwill survey. Practice sales as a percentage of goodwill continue to increase – particularly in the NHS and Mixed sectors.
The average goodwill value for practices being sold with an NHS contract is 153% of turnover; up from 140% in the previous quarter. Mixed practices have seen the average goodwill rise from 104% to 123% in only nine months.
Alan Suggett, specialist dental accountant and partner in UNW LLP, commented, “The market as a whole remains buoyant – it seems determined to ignore the uncertainty around the NHS in particular and is carrying on regardless . Indeed, one NHS practice sold for 294% of turnover and one mixed practice for 202% of turnover. Private practices have remained reasonably steady seeing an average goodwill figure of 84% - up from 76% at the end of October 2015.
Russell Abrahams, Senior Partner at Abrahams Dresden explained, “At the current time it seems that demand massively exceeds supply. It is a tough time to be an associate and many are keen to rush into practice ownership, with additional pressure from the increasing volume of corporate purchases. There is a good deal of family money in the marketplace along with banks that have a renewed appetite for lending. These trends look set to continue for the foreseeable future."
The goodwill figures are collated from accountant and lawyer members of NASDAL on a quarterly basis in order to give a useful guide to the practice sales market. These figures relate to the quarter ending 31stJanuary 2016. NASDAL reminds all that as with any averages, these statistics should be treated as a guideline only.
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