An average pub tenant could see profits drop to only £3,000 next year, as a result of falling revenues and rising costs, according to a leading market analyst. New research by Mark Brumby, analyst at Blue Oar Securities, has forecast that an average tenant or lessee could see their existing net profit of £32,850 decline to £3,259 the following year. The study estimates that pub companies such as Punch Taverns and Enterprise Inns may have to invest between £50m and £60m per annum on financial help for their tenants. Brumby said: “This is a sobering piece of work that has been bounced off a number of trade players. We are not bonkers and nor, do we believe, are we being unduly pessimistic. “If there is a silver lining to falling revenues and margins and rising costs then it has eluded us. Helping the tenants through this will cost a lot of money. Rent optimization may well be proven to have been a better course of action than rent maximization. “With this in mind we believe that the regional brewers will be in a better position to weather the coming storm.” The report said that while it expected tenants over time to adjust their model and cut costs, mainly labour, the transition would not be easy, immediate or cheap.