Tricky final quarter ahead

WITH just one period to go, likely winners of the first round of the Independent NatWest Management Challenge are starting to appear, writes Roger Trapp.

Several teams have taken the lead since the start of this year's challenge, sponsored by National Westminster Bank in association with the Independent, while others are impressing the stock market - and hence improving their share prices - by building up impressive assets.

The "quarter" just completed brought a seasonal boom that generally boosted profits, and the market will be looking forward to substantial half-year dividends. However, the round will end with a seasonal low, and some teams may be caught between trying to boost share price with attractive dividends and trying to retain liquidity to cover possible short-term losses.

The challenge involves teams of up to six members taking on the roles of directors in a medium-sized manufacturing company selling into the EU and US. Performance. measured by share price in ecus, is based on how the teams fare against each other and against a computer simulation developed by Scottish-based Edit 515.

The simulation takes in such functions as sales, marketing and resources. To be successful, teams must be able to cover these areas effectively and show strong balance sheets, good liquidity, effective R&D investment and a good share of the consumer market. They must also demonstrate good use of teamwork, communication, and trust, showing they are equipped to cope with a host of other problems.

So far, three teams have managed to push their share price above 1.6 ecus - Severn Trent Water, last year's winner, is leading with 1.7. But "The Borg", a building trades firm from Birmingham, and "Deja Vu", a team from the insurance industry, are also doing well.

The top two teams in each group will go forward to the second round when the competition resumes in September. The national final - with a pounds 10,000 cash prize and a place in the European final - will take place later in the year.