The hedge fund Shadowfall has taken a multimillion-pound bet against Rentokil Initial, asking questions about the FTSE 100 pest-control company’s margins on its Covid-related revenues.
Shadowfall, which has garnered attention for its work in exposing the German payment processor Wirecard, has queried the numbers Rentokil attributed to its income from disinfection revenues during Covid. Rentokil, which is focused on pest control, diversified into disinfectant during the pandemic.
According to a research memo prepared by Shadowfall, it suggests that the margins were in fact up to three times higher than those disclosed by Rentokil.
That would imply that its core business is relying on the disinfectant business to flatter its overall margins, according to Shadowfall.
The claims threaten to cause a row with Rentokil, which on