Independent valuations of Australian veterinary practices

Earnings first, then the risks attached to them

Most operating practices are valued by capitalising future maintainable earnings: the profit the practice can sustain, expressed as EBITDA (earnings before interest, tax, depreciation and amortisation) or EBIT (earnings before interest and tax), multiplied by a capitalisation multiple. The multiple is the inverse of a capitalisation rate, the return a buyer requires for the risk taken, net of expected growth. Because these practices are equipment intensive, EBIT, struck after depreciation, is often the better measure: a practice that has stopped replacing radiography and anaesthetic equipment shows a flattering EBITDA. Normalisation, the adjustment of reported profit for non-commercial and non-recurring items, comes first. See maintainable earnings.

Private-pay demand and no Medicare

Veterinary fees are paid by the animal's owner. There is no Medicare rebate, no PBS subsidy and no NDIS plan behind them, so revenue turns on household budgets, the fee schedule and whether clients carry pet insurance. Animal Medicines Australia's Pets in Australia 2025 survey put pet ownership at 73 per cent of households and annual pet spending at 21.3 billion dollars, of which veterinary services took 1.9 billion and pet insurance 1.0 billion. The same report found that 76 per cent of dog owners and 86 per cent of cat owners have no pet insurance, that around one in six cat and dog owners (cats 18 per cent, dogs 14 per cent) had deferred check-ups or vaccinations or cut medication, and that 12 per cent had needed financial assistance to pay for veterinary care.

Most invoices are therefore settled out of pocket, so a fee increase does not automatically become earnings: it is tested against visit volumes, average transaction value and visits per active client. The practice carries its own credit exposure, so the debtors ledger and bad debt history are examined.

The veterinarian workforce

Veterinarians are the constraint on earnings. Jobs and Skills Australia reported in December 2024 that the average time to fill a veterinarian vacancy had risen from eight weeks in 2014 to 25 weeks in 2023 on industry data, and that the occupation has consistently appeared in national shortage on its Occupation Shortage List. The Australian Veterinary Association's 2023/24 Workforce Survey found 36.8 per cent of vacancies took 12 months or longer to fill, and that in regional areas 44 per cent remained vacant for extended periods.

A valuation therefore tests revenue by veterinarian, pay against market, and what happens if one leaves. Where the principal is the main producer, replacing that output at a market salary is costed before earnings are capitalised, and key-person risk, the exposure of earnings to one individual, is reflected in the multiple. See practitioner dependence.

Licensing, approvals and who may own the practice

Veterinary registration sits with a board in each state and territory. None of Ahpra's 15 National Boards covers veterinarians, so there is no national scheme like the one for human health practitioners, and premises rules differ between states enough to change who can buy a practice and whether its approval to trade survives the sale.

In New South Wales, at the time of writing, a veterinary hospital licence under the Veterinary Practice Act 2003 (NSW) is required to perform major surgery on animals or to advertise premises as an animal or veterinary hospital. It must be held by a registered veterinary practitioner, or by a corporation in which one or more practitioners hold a controlling interest, and the premises must be managed by a superintendent who is a registered practitioner.

Queensland turns on premises approval rather than ownership: under the Veterinary Surgeons Act 1936 (Qld) a person may apply to the Veterinary Surgeons Board of Queensland to use premises as veterinary premises (section 25A), the Board may refuse only on stated grounds, including that no veterinary surgeon will be practising veterinary science there (section 25F), and conducting premises without a veterinary surgeon in full-time attendance during opening hours is separately misconduct in a professional respect (section 22F). Victoria has neither scheme: the Veterinary Practice Act 1997 (Vic) registers practitioners and lets the Veterinary Practitioners Registration Board of Victoria issue guidelines on standards of veterinary practice and facilities (section 62(1)(e)), but creates no premises licence and no ownership restriction.

South Australia and Western Australia register the premises themselves. The Veterinary Services Act 2023 (SA) and the Veterinary Services Regulations 2025 commenced on 1 July 2026, and the Veterinary Services Regulatory Board of South Australia states that only registered premises can provide veterinary services there: section 41 requires a responsible person for each registered premises, and where an entity owns or occupies them the Regulations require that person to be a veterinarian with primary registration resident in the State. A registration may also be conditioned on telling the Board of a proposed sale or transfer.

Under the Veterinary Practice Act 2021 (WA), in force since 18 June 2022, section 39 requires a veterinary supervisor who is a Western Australian veterinarian and the person in whose name premises are registered to be a practice owner and not bankrupt, and section 40(2) registers them in the applicant's name, so a buyer applies rather than inheriting the seller's registration. These Acts are amended from time to time, so the position is confirmed at the valuation date rather than assumed.

Scheduled medicines, radiation and the conditions of trading

Two further regimes travel with the premises. The first is medicines and poisons control, which governs how the practice obtains, stores, records and supplies Schedule 4 (restricted substances) and Schedule 8 (drugs of addiction) medicines. It is state legislation and it moves: in New South Wales the Poisons and Therapeutic Goods Act 1966 and its 2008 Regulation are to be replaced on 5 November 2026 by the Medicines, Poisons and Therapeutic Goods Act 2022 and its 2026 Regulation, approved by the Minister on 3 July 2026. Victoria frames it differently: its Department of Health states that veterinary practitioners are authorised under the Drugs, Poisons and Controlled Substances Act 1981, and its 2017 Regulations, to obtain, possess, use or supply scheduled poisons for the lawful practice of their profession.

The second is radiation. Imaging apparatus is licensed separately from the practice and the practitioner: under the New South Wales Protection from Harmful Radiation Act 1990, radiation management licence conditions require diagnostic imaging apparatus to be tested against the Environment Protection Authority's mandatory requirements by an EPA-accredited consulting radiation expert, who certifies that it complies. In Victoria the Department of Health states that a radiation management licence is mandatory for a company seeking to possess a veterinary radiation source, that compliance with the Code of Practice for Radiation Protection in Veterinary Medicine (2009) is a condition of it, and that a radiation management plan must accompany an application to transfer a licence to another legal entity. Compliance creates no value in itself, but a lapse, or a licence nobody transferred, can delay settlement or reopen a price.

Goodwill: the practice or the veterinarian

Goodwill is whatever a buyer pays over the identifiable assets net of liabilities. Personal goodwill follows the individual veterinarian and generally cannot be sold; transferable, or commercial, goodwill stays with the practice through its location, brand, client database, nursing team, systems and recall programs. A practice where clients book the practice rather than a named veterinarian, where new client flow is steady and where several veterinarians share the caseload has more transferable goodwill than one built around one principal. Apportioning between the two is the central question in most veterinary sales, buy-ins and family law matters.