DF Research issues cautious note on WillScot

DF Research, representing the opinions of Keith Dalrymple and Dalrymple Finance, issued a cautious note on WillScot (WSC), saying that the firm believes WSC is “dying,” and that the $302M write-off of 53,000 units, or about 15% of total rental units was “driven by escalating real estate costs rather than a realistic assessment of fleet value. We estimate the overhead on a per location basis has increased 30% over the last 5-years.” The firm believes what was identified as excess cash flow was the result of underinvestment and “using up” the fleet,and that as WSC’s old units roll-off lease, deployments must compete with a larger, younger industry-wide modular fleet. WSC must also contend with well-funded, fast-growing competitor going directly after the most desirable part of its business, the firm says.