CENTRAL GROUP pockets 76.5% of its sales, and the building sites are not why

A developer that keeps most of what it sells

If you have looked at a new flat in Prague, you have probably seen the CENTRAL GROUP name on a hoarding around a building site. The developer builds housing estates across the city. Its parent company, CENTRAL GROUP a.s. (an a.s. is a Czech joint-stock company), had an unusual 2025. It took in CZK 2.2bn in revenue and reported CZK 1.7bn in net profit. That is a net margin of 76.5%: most of every koruna of sales appears to have ended up as profit.

Set against other Czech companies, the figure looks almost implausible. The median net margin of 5 comparable firms in 2025 was 5.3%. CENTRAL GROUP sits 71.2 pp above that median. The figures are for the parent company alone, under Czech accounting rules, in CZK, for the calendar year, and the auditor, BDO Audit, signed them off without reservations.

Net profit also grew fast. It rose 169.0%, from CZK 639m in 2024 to CZK 1.7bn. Revenue more than doubled, up 118.2% to CZK 2.2bn from CZK 1.0bn. On the surface, this is a company outrunning everyone around it.

The turn comes one line higher up. Operating profit, what the company earns from its own day to day business before financing and investment income, was only CZK 103m. That is an operating margin of 4.6%, down 5.0 pp from 9.6% a year earlier. The peer median on that line was 10.8%, so on its operating business CENTRAL GROUP trails the same group by 6.2 pp. The parent beats its peers on net profit and lags them on operating profit.

Where the profit really comes from

The gap between CZK 103m of operating profit and CZK 1.7bn of net profit has to come from somewhere below the operating line. For a developer, the usual answer sits in its structure.

Czech developers typically put each housing project into its own company. CENTRAL GROUP's group chart is a long list of them: numbered investment companies, most of them s.r.o. (a limited liability company) or a.s., plus a parking garage company. Each one buys the land, builds the block and sells the flats. The parent manages, finances and owns them. When a project finishes and the flats are handed over, the profit sits in the project company. It reaches the parent as a dividend or a share of profit, which is booked as financial income, not as revenue from operations.

That would explain the pattern exactly. The parent's own revenue and operating profit cover its services and whatever it sells directly. The big money arrives from the subsidiaries once their buildings are done. The accounts do not split the parent's financial income into dividends, interest from loans to subsidiaries and gains on sales of stakes; that split would show how much of the CZK 1.7bn came from finished projects.

The operating squeeze has its own logic. Revenue grew CZK 1.2bn in a year, yet operating profit rose only CZK 4.4m, or 4.4%. EBITDA, operating profit with depreciation added back, rose 6.3% to CZK 125m, and its margin fell to 5.5% from 11.4%. When a developer's revenue doubles while operating profit barely moves, the extra sales usually carry thin margins: construction services billed to its own project companies, or sales handled at close to cost. The accounts do not say which applies here.

The operating line also shows a strain the net figure hides. Interest expense was CZK 53.6m, and operating profit covered it only 1.92×. On its own business, the parent earns enough to pay its interest, but not by much. The cushion comes from the subsidiaries' profits, not from the parent's operations.

What the comparison really measures

This is why a peer gap of 71.2 pp says less than it seems. The comparison companies, among them ČD Telematika, PKP CARGO INTERNATIONAL and KRÁLOVOPOLSKÁ, earn their profit mostly from what they sell. ČD Telematika, for example, turned CZK 3.8bn of revenue into CZK 377m of net profit, a net margin of 9.8%. For them the operating and net lines tell roughly the same story. For a holding company sitting on top of a long row of project firms, the two lines tell different stories, and the net one depends on when buildings are completed and handed over.

That makes the margin lumpy by nature. A year in which several large projects are finished and paid out produces a spectacular net profit. A year in which most estates are still cranes and concrete can produce far less, without anything having gone wrong. The 76.5% is a measure of timing as much as of skill.

The balance sheet confirms that the profit is real and that it stayed. Equity rose 11.3%, by CZK 1.7bn, to CZK 16.4bn, in line with the year's net profit. In 2024 equity already made up 86.0% of total assets, so the parent is funded overwhelmingly by its owners rather than its banks. That is a comfortable position for a business whose income arrives in waves.

What buyers, rivals and business owners can take from it

For people buying flats, a parent this well capitalised matters more than its margin. A developer with deep equity can keep building through a slow sales season instead of cutting prices or stopping sites. The steady stream of newly registered project companies in late 2026 suggests the pipeline is still being filled.

For rivals and for anyone reading developers' accounts, the lesson is about which line to compare. A parent company's net margin mixes its own business with the harvest of its subsidiaries. The operating margin of 4.6% is the cleaner measure of the parent itself, and there CENTRAL GROUP is ordinary.

For anyone running a business with subsidiaries or side investments, there is a simple check. Split your profit into what your operations earned and what came from dividends, interest and stake sales. Then ask whether your operating profit alone covers your interest comfortably. If the answer depends on next year's dividend, you know where your real risk sits.

CENTRAL GROUP did not outperform its peers by running its own business better; on that line it ran it thinner. It outperformed them by owning the buildings that got finished. I would watch the operating margin and the interest cover, because those are the numbers that stay put when no project happens to close.