Average Dental Practice Goodwill Values for Last Year

Ahead of the LDC Conference tomorrow as Gold Sponsors, Dental Elite prepare the latest average dental practice goodwill values based on completed sales in the Last Financial Year (ending 31st March 2015). This takes account of all completed transactions where Dental Elite has acted as an agent in this period.

The statistics demonstrate that the market has improved once again in the last year with the Pipeline Data (Transactions yet to complete or having completed since 31st March 2015) showing early signs of an even more significant jump next year.

Luke Moore, Co-Founder of Dental Elite commented; “I think anyone involved in Dental Practice Sales and Dental Practice Goodwill Values will have noticed that the market has gained considerable strength in the last year and our tried and tested, open bidding process is ensuring that we get the overall deal available on the market with most practices achieving over and above our valuation by a considerable margin, especially those which are predominately NHS.”

The latest statistics for all types of practice showed average sales standing at 3.23x Adjusted Net Profit for those practices which are Principal Led and 6.99x Adjusted EBITDA for practices being sold on an Associate Led basis which equates to an average of 137.8% of Turnover.

By way of comparison the figures for the same period last year were 2.93x Adjusted Net Profit, 6.27x Adjusted EBITDA and 122.13% of Turnover.

For the first year figures have also be released breaking down the statistics by types of practice based on income;

GWStats

An NHS Practice is deemed as a Practice where the income stream is more than 80% NHS, a Private Practice is where the income is more than 80% Private. Practices falling in between these parameters are deemed to be mixed.

Paul Wilkinson, Co-Founder of Dental Elite added; “I think the breakdowns are actually more interesting as it would seem that practices which are Mixed tend to sell more to Dentists who seek to work in the practices themselves, hence the slightly higher EBITDA multiple which is counteracted by the lower Adjusted Net Profit Multiple, it is also interesting to see Private Practice Multiples starting to narrow the gap between NHS Practices”

“Whilst these statistics are always interesting, you should remember that these are average figures and by the nature of averages the results can be skewed by some results which sit outside the ‘norms’. The only way to calculate an accurate goodwill value is to have a professional valuation carried out which Dental Elite are happy to complete both free of charge and without further commitment”

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