NO TIME LIKE THE PRESENT
If we think back around two years, and to the start of the pandemic, there was, not surprisingly, a lot of uncertainty and pessimism about how almost every sector of the economy would perform and how and when a recovery would begin. The market for dental practices was no different, and that’s why the results from the recent NASDAL (National Association of Specialist Dental Accountants and Lawyers) makes such interesting reading.
The survey statistics are gathered from the accountant members of NASDAL across the UK who together act for more than a quarter of self-employed dentists. The statistics provide average ‘state-of-the-nation’ figures so NASDAL accountants can benchmark their clients’ earnings and expenditure and help them run their practices more profitably.
The figures cover the financial year 2020-2021, or to be more specific the tax year starting 6th April 2020. Since the first nationwide lockdown began only a fortnight before this, it’s reasonable to assume that the harshest impact of the uncertainty is largely reflected in the data in the survey. It is encouraging to see that overall, the average profit per dental practice rose by around 17% (from £129k per annum to £152k), when split between practice type, NHS practices show a 25% rise (£116k to £145k) and private practices a more modest, but nevertheless healthy, upturn of 8% (£133k to £143k).
Ian Simpson, chartered accountant and a partner in Humphrey and Co, which conducts the statistical exercise commented, “This year’s benchmarking figures are the first to reflect the seismic change that was the Covid pandemic. The increase in profits seems to demonstrate that despite being closed from late March to early June, practices bounced-back to recover lost revenue in the latter part of the year when pent up demand was unleashed.”
Andy Acton of Frank Taylor & Associates, also observed, “The figures are encouraging, of course, but we must remember that a ‘high level’ average across a large population doesn’t reflect the practices that have struggled both during lockdown, and since “.
“What is also interesting”, continues Andy, “is that the average remuneration for an associate fell, by around 10% in the survey period. With overall practice profitability on the increase, now may be an opportune moment for many associates to take the ‘next step’ to practice ownership. It may seem a big step, but if the gap in earnings between associate and principal continues to widen, then when it comes to buying a practice, there really is no time like the present”.
