Sponsored article: C+D quarterly guide to UK pharmacy sales
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C+D has teamed up with pharmacy sales experts HPG to give you a quarterly snapshot of what's happening in the market. If you're thinking of buying or selling a pharmacy, HPG are on hand to answer any questions you may have
Demand is high for pharmacy properties, says Robert Miller, director at HPG Business Sales. He picks out the sales highlights and lowlights of the first quarter of 2014 and explains what they mean for the market as a whole. Mouse over the ‘more below' buttons for the key points from each area.
Goodwill is the portion of the purchase price (usually 99%+) paid for the ongoing earning power of the business.
The ratio is the purchase price divided by the turnover.
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It's tough to get buyers for this kind of price but there are big corporate buyers such as Boots, Lloyds and Day Lewis and the larger independent pharmacy chains with anything between six and 50 pharmacies like Safedale and Paydens. They are the people who will buy a pharmacy of this value: it won't be people starting out |
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This pharmacy was bought by a chain because they had another pharmacy in the same town. East Anglia has been traditionally a less sought-after area for pharmacies. For many years, there was no school of pharmacy so, for the most part, you're looking for someone to move out there |
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In this case, there was a bit of a query as to whether the local surgery might be relocating. That's a real threat because the relationship with the surgery is vital; the majority of pharmacies get at least 90 per cent of their income from the NHS |
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There's a sweet spot between £500,000 and just short of £1 million where there's a lot of affordability. So many people can afford it that you get more competition and more offers |
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Robert Miller,
director, HPG Business Sales
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It's a buoyant market at the moment. Part of the reason is because there are 2,500 pharmacists qualifying every year and only a few entering retirement, and there aren't any new positions being created. Being a locum used to be a very lucrative position but that's no longer the case because rates have fallen very sharply.
Bearing this in mind, many newly qualified pharmacists want to own their own business and we're seeing very good family support in helping out with deposits. Banks are also very happy to lend to the healthcare sector and will generally lend about 70 per cent of a pharmacy's purchase price.
Demand has probably pushed pharmacy prices up by about 20 per cent in the past 18 months. We've seen some pharmacies being sold for a turnover: goodwill ratio of £1:£1.35 and we're going to see even more deals being done at that level. That's where the market is going. Prices are going to be higher in London and other metropolitan areas such as Birmingham and Manchester." |
