We Think Grand Central Enterprises Bhd (KLSE:GCE) Can Afford To Drive Business Growth

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?

Given this risk, we thought we'd take a look at whether Grand Central Enterprises Bhd (KLSE:GCE) shareholders should be worried about its cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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How Long Is Grand Central Enterprises Bhd's Cash Runway?

A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. As at September 2025, Grand Central Enterprises Bhd had cash of RM38m and no debt. Importantly, its cash burn was RM4.5m over the trailing twelve months. That means it had a cash runway of about 8.4 years as of September 2025. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. The image below shows how its cash balance has been changing over the last few years.

See our latest analysis for Grand Central Enterprises Bhd

How Well Is Grand Central Enterprises Bhd Growing?

We reckon the fact that Grand Central Enterprises Bhd managed to shrink its cash burn by 38% over the last year is rather encouraging. Revenue also improved during the period, increasing by 7.9%. Considering the factors above, the company doesn’t fare badly when it comes to assessing how it is changing over time. In reality, this article only makes a short study of the company's growth data. You can take a look at how Grand Central Enterprises Bhd has developed its business over time by checking this visualization of its revenue and earnings history.

Can Grand Central Enterprises Bhd Raise More Cash Easily?

We are certainly impressed with the progress Grand Central Enterprises Bhd has made over the last year, but it is also worth considering how costly it would be if it wanted to raise more cash to fund faster growth. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

Since it has a market capitalisation of RM84m, Grand Central Enterprises Bhd's RM4.5m in cash burn equates to about 5.4% of its market value. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.

So, Should We Worry About Grand Central Enterprises Bhd's Cash Burn?

It may already be apparent to you that we're relatively comfortable with the way Grand Central Enterprises Bhd is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. On this analysis its revenue growth was its weakest feature, but we are not concerned about it. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term. On another note, Grand Central Enterprises Bhd has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.