What is my pharmacy worth? How community pharmacies are valued in Australia.
A community pharmacy is usually valued as a multiple of its maintainable earnings, plus stock at value. Maintainable earnings are the profit after paying a market wage for any pharmacist work the owner does, and after the usual add-backs. What moves the value most is the dispensary's script volume and margin, the front-of-shop, the lease, and the fact that only registered pharmacists can buy a pharmacy, which limits who can bid.
This guide covers independent and banner-group community pharmacies. Hospital and compounding-only pharmacies follow similar logic but have their own specialist buyers.
Start with maintainable earnings
Start from net profit before tax and add back the usual owner items: depreciation, interest (often on stock finance), private use of a car, and genuine one-off costs. Add-backs explained.
Then make the pharmacy-specific adjustment:
- A market wage for your own pharmacist hours. If you work in the dispensary and take your income as profit, a buyer has to pay a pharmacist to cover those hours. Deduct a market wage and super for that role, at least at Pharmacy Industry Award rates, and more if pharmacists are hard to find in your area.
- Unpaid or underpaid family help in the shop or office is costed at a market wage.
Stock is valued separately at settlement, usually at cost, so it isn't part of the multiple. Old, damaged or slow-moving stock is normally excluded or discounted.
What moves the price
Who can buy
In every state and territory, a community pharmacy can only be owned by registered pharmacists (or companies they control), and some states limit how many pharmacies one owner can hold. That keeps the pool of buyers smaller than for most businesses. Banks are often comfortable lending to pharmacist buyers, which supports prices.
The dispensary
- Buyers look closely at monthly script numbers, the trend over two to three years, and the dispensary's gross profit.
- Changes such as 60-day dispensing (from 2023) and each Community Pharmacy Agreement change script volumes and dispensing income. Show how your numbers have moved through those changes.
- Professional services add value: vaccinations, dose administration aids, medication reviews and other paid services, especially if they're growing.
Front-of-shop
Retail sales of health, beauty and general products can be a big share of turnover but usually earn lower margins. Buyers want to see the margin as well as the sales, and how well the shop competes with nearby discount and supermarket chains.
Location and the approval to dispense
The approval to supply PBS medicines is tied to the premises under the Pharmacy Location Rules, so a pharmacy usually can't simply move. That makes the lease critical: a buyer will want a long lease, with options, at the current site. A short lease, or a landlord who won't renew, can take a lot off the price.
Banner groups and staff
- If you trade under a banner or franchise group, check whether the group must approve the buyer and what fees and obligations transfer.
- A settled team of pharmacists, dispensary technicians and retail staff helps the pharmacy keep running after the sale. Show roles, hours and pay (no names at first).
A worked example
All figures are illustrative, made up for this example, and are not industry data.
A suburban independent pharmacy in a shopping strip turns over $3.2 million a year. The owner pharmacist works full time in the dispensary and takes no wage: their income is the profit. Net profit before tax was $420,000. Stock on hand is about $380,000.
| Item | Amount |
|---|---|
| Net profit before tax | $420,000 |
| + Depreciation (fit-out, dispensary equipment and software) | $35,000 |
| + Interest on stock and fit-out finance | $20,000 |
| + Private use of the owner's car | $5,000 |
| – Market wage and super for a full-time pharmacist in the owner's place | –$130,000 |
| Maintainable earnings (EBITDA) | $350,000 |
If buyers were paying, say, 3.0 to 4.0 times earnings for a pharmacy like this (illustrative), the business would be worth about $1,050,000 to $1,400,000, plus stock at value (about $380,000 here).
Two things would move it within the range: the script trend, and the lease. Growing scripts and a long lease at the current site push it toward the top.
What buyers of pharmacies will ask for
- Two to three years of profit and loss statements, plus the current year to date
- Monthly script numbers and dispensary gross profit for the same period
- Front-of-shop sales and margin by category
- Income from professional services
- The lease, including options, the current rent and the make-good clause
- Staff roles, hours, pay and qualifications (no names at first)
- Any banner or franchise agreement, and a recent stocktake
Selling it yourself? How to sell your business yourself in Australia. Other health practices: medical, dental and allied health.
What's your pharmacy worth?
Upload your P&L, and add your lease and staff list if you have them. AUS Brokers works out your maintainable earnings with the add-backs explained, applies the multiple range for pharmacies of your size, and checks comparable pharmacies for sale in your state. You can add a buyer-ready profile to market it yourself.
An indicative business appraisal only. AUS Brokers doesn't provide valuations, and doesn't act for buyers or sellers. If you need a valuation for finance or a partner buy-out, use a qualified valuer. Selling in Victoria? Vic Brokers can sell it for you.
Frequently asked questions
How much is a pharmacy worth in Australia?
It depends mainly on its maintainable earnings: the profit after a market wage for any pharmacist work the owner does, and the usual add-backs. That figure is multiplied by what buyers pay for pharmacies of that size, and stock is added at value. Growing scripts, healthy margins and a long lease push the price up.
Who can buy my pharmacy?
Only registered pharmacists, or companies they control, can own a community pharmacy in Australia, and some states limit how many one owner can hold. The buyer pool is smaller than for most businesses.
Is stock included in the price?
Usually not in the headline price. Stock is counted at settlement and paid for on top, normally at cost, with old or damaged stock left out or discounted.
Can I move my pharmacy to a new site?
Not easily. The approval to supply PBS medicines is tied to the premises under the location rules, so a move needs approval. That is why the lease matters so much to buyers.
Does 60-day dispensing affect what my pharmacy is worth?
It can. It changed script numbers and dispensing income for many pharmacies. Buyers will look at how your numbers have moved since, so show the trend clearly.
Is an appraisal enough for a bank or a partner buy-out?
No. An appraisal is an indicative estimate to help you plan and price a sale. For finance, a partner buy-out, family law or tax, you need a formal valuation from a qualified valuer.
General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.