C+D has teamed up with pharmacy sales experts HPG to give you a quarterly snap shot 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.
‘The market is buoyant and looks set to stay that way’
Robert Miller, director, HPG Business Sales
“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.”