No Pain, No Gain: GSC goes major league with five-a-side football

Investing in football can be a perilous exercise. Ask the thousands who pumped cash into the dozen or so clubs that rushed to tap the stock market in the 1990s.

Investing in football can be a perilous exercise. Ask the thousands who pumped cash into the dozen or so clubs that rushed to tap the stock market in the 1990s. Most of the investors lost money as it became apparent that the national sport's ability to attract huge amounts of cash was overwhelmed by a business acumen that at times resembles a losing match plan.

Manchester United is probably the only club to have served investors well. It has scored on the profit and dividend fronts, yet the strength of its shares owes much to continuing takeover speculation. Elsewhere, it is a dismal story with most surviving football shares pale shadows of their long-gone glory days.

Still, a fledgling company is proving that football and investors can mix - providing little five-a-side soccer centres are substituted for high-capacity arenas.

Goals Soccer Centres runs a dozen outlets catering for what some call small-side football, but is more widely (and sensibly) known as five-a-side soccer.

There is, I realise, a danger I have dillied and dallied too long over GSC. The shares have had an exceedingly strong run since they arrived in December and recent better-than-expected figures are giving them championship quality. The net result is that they are ahead of the game.

Normally, I resist the temptation to buy when a share sports a fancy price. But I am making an exception. The GSC story is a good one and I feel the shares represent an exciting addition to the No Pain, No Gain portfolio. I acquired them at 125.5p.

The company, the brainchild of chief executive Keith Rogers, achieved profits of £613,000 last year (against flotation estimates of £400,000) and about £2.9m is expected this year with nudging £5m pencilled in for next. Mr Rogers wants to roll out another 14 sites in the next three years, with five of them due to kick off this year.

An experienced five-a-side man, he co-founded a company called Anchor International which opened its first centre in 1987. The operation grew and was absorbed by the investment giant 3i for £28m six years ago. He then started GSC, helped along by acquiring five centres backed by HBOS, the Halifax giant, and the Dunedin investment group.

Competition is tough, even in the young world of five-a-side soccer. Biggest player is Powerleague with 25 centres. JJB Sports, the sports retailer run by Wigan FC chairman and ex-footballer Dave Whelan, has four outlets.

Five-a-side, with its own league and cup competitions, enjoys many advantages over weekend park games. For one thing, the facilities are infinitely better. No shivering in cold, draughty, leaky changing rooms without showers.

And there is no danger of a quagmire pitch, ankle-deep in mud. Instead, the five-a-sider enjoys true artificial grass pitches and sophisticated facilities. Floodlights allow games to be played deep into a winter evening and, when the match is over, there is a chance to enjoy a relaxing drink in a well-appointed clubhouse.

Indeed, chairman Sir Rodney Walker, the experienced sporting businessman who once headed Leicester City, says 30 per cent of GSC's income stems from non-footballing activities.

GSC is my second recruit this year. I much prefer a home-grown leisure share to the weird and wonderful resource stocks flocking onto the stock market. It is almost as if an underground version of the dotcom craziness has materialised. One fund manager of my acquaintance, who resisted the internet bubble, is aghast at the absurdity of what he regards as blind, hole-in-the-ground enthusiasm.

Some resource shares will come right. But my bet is most will sink into oblivion - with nothing in their lockers and their cash exhausted. It is worth remembering that the high-tech bubble burst five years ago last week, leaving many small investors poorer but (hopefully) wiser. I have no idea how much longer the resource horses will thunder around the stock market track. What is clear is that, sooner rather than later, investors will once again be out-of-pocket, regretting their involvement in yet another investment fad.

High commodity prices have prompted much of the resource mania. A most unlikely collection of mining and oil companies has raised cash, often offering little more than vague promises. Some resource groups have been around for years; and many of these veterans have still to produce anything for shareholders. Indeed, only quick-fire trading - an ability few part-time investors possess - offers hope of profitable salvation.

The first portfolio newcomer this year was Georgica. It has so far been a disappointment, but I remain hopeful that my investment in the cue sports and tenpin bowling group will eventually be a rewarding one. With two constituents falling to takeovers, and a third, MacLellan, deep in merger talks, it is clear that more additions are required.