A sharp reverse of goodwill across almost all practice types has been revealed by the latest NASDAL Goodwill survey, with only NHS goodwill on the increase.
Almost all practice types have seen a sharp decrease in goodwill, statistics show. This is as a percentage of fee income in the quarter across all types of practice.
This comes after the publication of the latest results from the NASDAL Goodwill Survey.
This significant drop follows a recent pattern of increases.
However, NHS practices saw an increase of over 30%.
The survey, published last month, covers the quarter ending 30 April 2022.
The data also includes valuations and deals completed during this period. This includes practices bought or sold by NASDAL members’ clients.
Overall, the statistics show a substantial decrease in goodwill.
Significant decrease
In addition, while the previous quarter’s deals averaged 166%, the survey shows this has dropped to 143%.
As well as this, private practices saw practice goodwill at 124% of gross fee. This is a significant decrease from 155% in the last quarter.
Mixed practice goodwill values were also on the slide. They dropped to 132% of gross fees from 189% in the previous quarter.
NHS practices did see an increase – they were at 178% of gross fees – up from 141% in the quarter to 31 January 2022.
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Wider concerns?
Mike Blenkharn is a specialist dental accountant and partner in UNW LLP who compiles the goodwill survey.
He said: ‘It is interesting to see a big fall back across many practice goodwill values.
‘We can perhaps speculate that, as the market returns to a bit more normality, it should be expected that figures fall back a little.
‘It also could be symptomatic of wider concerns in the economy as a whole.
‘We have seen a low number of NHS practices come to market this quarter, which may have skewed that data somewhat and the rise.
‘However, there is a lack of confidence in the market for NHS practices and it will therefore be interesting to see if this trend in goodwill values continues in future quarters.’
The goodwill figures are collated from accountant and lawyer members of NASDAL in order to give a useful guide to the practice sales market.
NASDAL reminds all that as with any averages, these statistics should be treated as a guideline only.
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