Lis Hughes gives her thoughts on how the year has gone and what the future might hold.
The onset of a new year provides an opportunity to look back as well as look forward.
In 2018 Frank Taylor & Associates saw the number of associates registering an interest in buying a practice rise to 5,000. On average, an associate achieves 50% on private fees and for NHS work, between £11 and £11.50 per UDA, therefore the relative proportions of private/NHS patients can significantly affect the profitability of a practice.
Last year there was a steady increase in the number of new corporate bodies entering the market place, some with considerable capital to spend. Interestingly, there was also a significant growth in the number of associates forming their own small groups to buy practices.
A surge of interest in private practices has also been witnessed, particularly as there continues to be uncertainty about the impact of the proposed revisions to the NHS-GDS contract. Banks also value private practices, especially those offering the security of regular income from a capitation scheme. Dentistry is still considered a very safe option, thankfully, meaning banks continue to be willing lenders. However, they require substantial due diligence and sellers must meet detailed information requirements for buyers; this is often the biggest delay in any sales transaction.
Looking forward? Brexit will understandably dominate the early part of 2019. It is predicted that practice goodwill values will continue to be strong and whilst there is little evidence of a downturn in demand, the industry is certainly not immune to the impact of Brexit on the confidence of the market.