Author: Will Brown

Most pharmacy owners will be familiar with the concept of capitalisation rates and their relevance to pharmacy valuations and sales. However, for those starting out on their ownership journey, who may not be across all the industry jargon, below is some information to help you understand this important component of pharmacy transactions. What is a capitalisation rate? A capitalisation rate (often shortened to ‘cap rate’) is a financial metric used to show an expected ‘return on investment’ or ‘yield rate’ associated with an asset, in this case a pharmacy business. It is calculated by dividing the business’s annual operating income…

At AP Group we believe it is best practice to have listings supported by a Valuation Report, or ‘Indicative Valuation’ Report, from an accredited pharmacy valuer. Occasionally, due to the thorough process of having a Valuation completed, people will query the rationale behind this approach. Basically, there are two key reasons for this. Firstly, the Valuation will always influence the sale price at some point in the transaction. Secondly, “broker’s numbers” are often not as accurate as an independent valuation and are therefore not as trusted by the market. In the vast majority of cases, the purchaser will require finance…

Jules Fletcher was battling extremely difficult circumstances when she contacted me in early 2022. Her husband, Mark, had passed away suddenly from a stroke in 2021. Mark was the registered pharmacist and owner of Strahan Pharmacy, the business they established and developed together over 11 years. Although Jules is an experienced pharmacy assistant, she is not a pharmacist herself, and pharmacy ownership laws dictated that she had to sell the business within a year, or it would be shut down. In the interim, while she was grieving, she had to operate the pharmacy without Mark and maintain the vital care…