Practice Valuations Update – September 2016

Post referendum update.

It’s been over 2 months since the UK took the decision to Brexit. We have seen some instability in house price valuations, whilst the FTSE remains very strong, but what about UK Dental Practice Valuations?

Perhaps its too early to say, but since the Brexit vote and up to the end of August , compared to the previous 3 months, we have seen an increase in valuation services by 20% , a decrease in *EU citizens viewing practices by 30% and an increase in overall potential buyers viewing practices by 10% (*living in the UK for the last 5 years).

From our experience, it really is business as usual and we are most definitely busier than pre-Brexit. Whilst much negotiation needs to be done in respect of the UK’s exit from the EU, in the Dental sector, the lowering of the UK base rate has only provided further support for people wanting to buy practices.

Who is actually busy buying practices?

Small, medium and large size Corporates are busier than ever, whilst first time buyers and second time buyers are also keen on buying too. In addition, we are seeing well funded new investors entering the Dental market, to build new corporate chains for buy and build projects.
Currently, the demand for dental practices is at a record high, with a very limited supply available.

Every £1000 in profit, will increase the value of your practice by £6000

The current average purchase multiple across all single practice types is x5.78 x EBITDA , meaning that for every £1 that a practice owner is able to save and add to the profit line this equates to approximately £6 more on the valuation. In essence, for every extra £1000 profit your business makes, translates into an increase in the valuation by about £6000.

So for those considering a sale in the short to medium term, to maximise the valuation price, the focus has to be on improving the profitability of your practice.

Free Practice Valuations if you are thinking about selling

At Samera Practice Sales, we provide a free valuation service for anyone thinking about selling their practice now or in the future.

Contact us today!

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About Arun Mehra

Arun Mehra FCA is a world leading expert on Dental Business and CEO of Samera. He has extensive expertise on financing, deal structuring and tax issues arising in Dental Businesses.

Outside of Dentistry, you can probably find him with a backpack travelling around the world.

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