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The Trendlines Group was a guest in a Corporate Connect webinar hosted by the Securities Investors Association of Singapore (SIAS) last week. Critically, he said once those exits happen, the company will distribute dividends. |
The following are edited excerpts of the Q&A session.
Q1: How does the company view long-term returns for shareholders who have held shares since the IPO period?
A: What we have done in the last two years is -- focus. We are focusing on one primary thing, which is exits, large exits for our portfolio companies.
We believe that once we achieve that, we will get back the trust of our shareholders. We will be able to show them the returns that they expect. We do understand some of the concerns that long-term shareholders have with the performance of Trendlines, but we are excited and convinced that the future will prove that the latest changes that we've done will bring fruits.
Q2: Can you share details on the financial performance trajectory in terms of revenues and profits?
A: It will be hard to try and measure Trendlines via the financials of the company. The main source of income is the valuation process that is done on our portfolio companies. The accounting valuation, which is being done by a reputable external evaluator, can give a value to a company -- which does not necessarily represent the value of the company the way we and investors see it.
Once we have exits, we'll be able to distribute dividends to our shareholders. On the expense side, we have reduced operating costs by more than 60% over the last few years to make sure that we are treating the shareholder money properly and using most of the money to invest in the portfolio companies. 
Phytolon is one of the next possible exits for Trendlines. Phytolon produces high-quality natural food colors from baker’s yeast fermentation technology.
Q3: Are there any strategic plans in place to transform or strengthen the business going forward?
A: The way for us to strengthen our strategy is to keep focus. We made a decision two years ago to stop investing in new ventures. We're no longer investing in new companies or initiating new ventures. We are very, very focused on the 40 portfolio companies. Several of them can be huge, huge exits for Trendlines.
We invest money in those companies during the fundraising process, so as not to be diluted to a single digit percent, but will be able to exit on a 15 or 17 or 20% holding.
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Q4: What factors contributed to the changes in the share price value since the IPO period?
Also, there were mistakes the company made, for example, looking for new ventures over and over, rather than concentrating on the amazing portfolio companies that we have. Now, you no longer need to wait five or six or 10 years for the next exit , because many of our companies are at the stage that they are equipped to exit in the coming years. The time to exit is much, much shorter. Q5: Is the current share price consistent with the company’s financial performance? Q6: Why are Trendline share trading halted? |
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Q7 Are the 40 portfolio companies profitable or cash flow positive?
A: None of our portfolio companies are cash positive. They are all startups, although we have a few who are already in the commercial stage. The goal of each and every one of those companies is to be acquired by a strategic for an M&A deal or go to an IPO, any of the other forms of exits. We are not going to hold companies until they are profitable; it's not our business model.
Q8 Do you see any likely good exits in the next 24 months?
A: I believe that in the coming 18 to 24 months, we'll be able to see some exits. That's the most I can say at this stage.
Q9: Can you assure us that exits will not be similar to that of Stimatix GI?
A: Stimatix was an exit that we did a few years ago, which we sold to a large corporation (B. Braun). The upfront money from this deal was relatively small, with very high expectations for returns from royalties. Unfortunately, they did not treat this asset as we thought they would, and Stimatix was closed. We do not expect to get any returns from that. Lesson learned: we should try and avoid deals that give us a very small upfront sum while setting big expectations for future royalties.
Q10: What is the strategy to accelerate commercialization or exit for existing companies?
A: There are no shortcuts; it takes time for the companies to develop and go through the regulations until commercialization. In addition to the great support that we are giving, we are also heavily involved in all the discussions and meeting with strategics, and that's one of our biggest strengths. We have a great relationship with everyone in the industry and everyone in the strategic areas.
We are able to bring great strategics into our companies. Not always commercialization is the goal; sometimes the goal can be FDA approval, which is a trigger for the company to go on exit.
| SIAS moderator: To wrap up, what should shareholders be more focused on about Trendlines and what can they look forward to in 2026? A: The one thing I want people to take out of this meeting is to understand the potential of what Trendlines can be and what it can mean to them from here forward. We would like to honour and appreciate those who have been with us for a long time. Also for newcomers, look at the potential, look on what we can achieve. We are looking for great growth. |
→ See also: TRENDLINES CEO on why there'll be "multiplication of returns" when exits happen
