Bizval Indicator Report
for June 2025
We like to think of the Bizval Indicator as a ‘barometer’ of SME valuation multiples providing a perspective of the value of New Zealand small-to-medium sized businesses.
Unlike listed companies, the sale prices of SME’s are not readily available. The Bizval Indicator helps monitor movements in the drivers of SME values.
The Bizval Indicator is derived from key drivers of SME values and is then reviewed in the context of a basket of general economic indicators.
Bizval Indicator
| NOW | LAST YEAR | MOVEMENT |
|---|---|---|
| 397 | 350 | 13.5% |
Source: Bizval, 30 June 2025.
Bizval Indicator maintains positive trajectory in June 2025
The Bizval Indicator maintained its positive trend in the June 2025 quarter with an indicator reading of 397, up from 350 one year ago, representing an increase of 13.5%.
After four positive quarters, the indicator is now back into similar territory of that last seen in June 2022.
Almost all facets of the Bizval Indicator posted year-on-year increases in the June 2025 quarter. The Price Earnings (P/E) ratios of small NZX companies were once again the most significant influence, followed by business finance rates (which are decreasing).
Share transfers, personal separation and business owners preparing for sale were the most common purposes of our valuations over the June 2025 quarter.
General Economic Indicators
| INDICATOR | NOW | 1 YEAR AGO | MOVEMENT |
|---|---|---|---|
| NZX 50 NZ (1) | 12,603 | 11,717 | 7.56% |
| RBNZ Official Cash Rate NZ (2) | 3.25% | 5.50% | -2.25% |
| GDP NZ (3) | -1.10% | 0.20% | -1.30% |
| Dow Jones Industrial Average USA (4) | 44,095 | 39,119 | 12.72% |
| Inflation (CPI) NZ (5) | 2.50% | 4.00% | -1.50% |
| Unemployment Rate NZ (6) | 5.10% | 4.30% | 0.80% |
(1) Source: NZ Stock Exchange, 30 June 2025
(2) Source: Reserve Bank of New Zealand, 28 May 2025
(3) Source: Stats NZ, 31 March 2025
(4) Source: New York Stock Exchange, 30 June 2025
(5) Source: Stats NZ, 31 March 2025
(6) Source: Stats NZ, 31 March 2025
GDP
Economic activity rose 0.8% in the March 2025 quarter as measured by gross domestic product. This follows a 0.5% rise in the December 2024 quarter. GDP fell 1.1% over the year ended March 2025 compared with the year ended March 2024.
While GDP measures economic activity, real gross national disposable income (RGNDI) measures the volumes of goods and services that New Zealand residents have command over, that is, the real purchasing power of the country’s disposable income. RGNDI is also affected by changes in the terms of trade, the country’s net investment income, and net transfer flows with the rest of the world.
Annually, RGNDI fell 0.5% over the year to March 2025, while RGNDI per capita fell 1.8% over the year.
(Source: StatsNZ)
Official Cash Rate
On 28 May 2025 the Monetary Policy Committee voted to lower the OCR by 25 basis points to 3.25%.
Annual consumer price index inflation increased to 2.5% in the first quarter of 2025. Inflation expectations across firms and households have also risen. However, core inflation is declining and there is spare productive capacity in the economy. These conditions are consistent with inflation returning to the mid-point of the 1 to 3% target band over the medium term.
The New Zealand economy is recovering after a period of contraction. High commodity prices and lower interest rates are supporting overall economic activity.
Recent developments in the international economy are expected to reduce global economic growth. Both tariffs and increased policy uncertainty overseas are expected to moderate New Zealand’s economic recovery and reduce medium-term inflation pressures. However, there remains considerable uncertainty around these judgements.
(Source: Reserve Bank of NZ)
Drivers of SME Values
The Bizval Indicator is calculated using a proprietary formula. We research, monitor and evaluate the following components to arrive at the result.
NZX Small Cap P/E Ratios
Small Capitalisation companies have greater similarities to private SMEs than large cap stocks. Bizval reviews the mean and median price earnings (P/E) ratios of companies with market capitalization of between $20 million and $200 million. We adjust these figures to align them more closely with private SMEs by reducing the P/E ratios to account for differences in size, key-person dependence and ability to easily buy or sell (liquidity).
Return to Bizval Indicator Report
Business Loan Interest Rates
Bizval monitors the advertised interest rates of New Zealand major banks for business loans. Using an average of these rates we then add a risk margin (commonly added to the base rate by banks when lending to small businesses). We also add a hypothetical margin for the SME proprietor to reflect their return on investment. This interest rate is then converted to a multiple.
Return to Bizval Indicator Report
Businesses for Sale
Bizval undertakes a review of the volume of businesses listed for sale across New Zealand, taking into account any movements in this number.
Return to Bizval Indicator Report
Bizval Multiples
We review an average of the multiples used in our business valuations and combine these with multiples from actual business sales (where available).
Return to Bizval Indicator Report
In addition to the four drivers of SME values, the Bizval Indicator is evaluated in the context of six national / international General Economic Indicators.
The NZX 50 Index (New Zealand Stock Exchange)
The NZX 50 Index (NZ50) is the primary stock market index in New Zealand. It comprises the 50 biggest stocks by free-float market capitalisation trading on the New Zealand Stock Market (NZSX).
Reserve Bank of New Zealand Official Cash Rate
The RBNZ sets the target ‘cash rate’, which is the market interest rate on overnight funds. It uses this as the instrument for monetary policy and influences the cash rate through its financial market operations.
Gross Domestic Product (New Zealand)
GDP is a monetary measure of the market value of all final goods and services produced over a defined period of time.
Dow Jones Industrial Average (USA)
The ‘Dow’ is a US stock market price-weighted index monitoring the share trading performance of 30 large, publicly owned American-based companies.
Inflation Rate (New Zealand)
The Consumer Price Index (CPI) measures the average change over time in the prices paid by New Zealand households for a fixed basket of goods and services.
Unemployment Rate (New Zealand)
This indicator is the official unemployment rate for New Zealand. The unemployment rate reflects conditions of the labour market and economy overall. It gives a sense of the number of people seeking work.
Return to Bizval Indicator Report
An independent business valuation compiled by a professional can help. Contact BIZVAL or order your business valuation today.