Newsagency Values

The newsagency market is a mature mass market with stable long-term consumer demand for newsagents core product. The continuing and ever increasing life-style driven demand for news and entertainment, information, education and personal services has ensured the Goodwill of newsagencies has been, and continues to remain, high. This Goodwill is further underpinned by the publisher and Tatts/The Lott/Lotto/Casket supply contracts, which all combine to make a newsagency a sound business investment.

Prices & overall costs of acquisition for newsagencies are dictated by the market, and range from approximately $100,000 to several million dollars. The Purchase Price is normally the total of Goodwill (which should but does not always include plant & equipment, fixtures and fittings, motor vehicle etc) plus Stock at Valuation (SAV). The Goodwill of a business is normally a multiple or factor of the adjusted net profit to the owners, or Owners Profit.

Owners Profit is calculated as a return to 2 working owners, doing reasonable hours, before any form of owners remuneration, interest & borrowing costs, depreciation, taxation, amortization, personal expenses and any one off, non-recurring expense (known as Addbacks).  This is also known as P.E.B.I.T.D.A,  (Proprietors Earnings Before Interest Taxation Depreciation & Amortisation/Adjustments/Addbacks)

Factors such as geographic location, lease conditions rates & term, type of shopping centre, condition of the shop-fit, degree & quality of infrastructure and the number and type of publisher contracts held will determine (amongst other things) the multiple or factor of Owners Profit that buyers are prepared to pay as Goodwill for any particular business.

There has become a difference between “buying a business” and “buying a job”, and contract values engaged are now reflecting this difference. For a clear understanding of the difference, talk to one of our Business Brokers.  Beyond this, any business is worth what a buyer is willing to pay, and a seller is willing to accept, and the newsagency sale market (like any trading market) sets itself on the precidence of prior sales.