Interim Results

Impax Environmental Markets plc

Preliminary announcement of interim results for six months ended 30
June 2005

Key points


  * Net asset value per share of 81.3p as at 30 June 2005, an
    increase of 6.8% from 31 December 2004



  * The Company is considering proposals for a further issue of
    shares (with accompanying warrants) to both existing shareholders
    and new investors



CHAIRMAN'S STATEMENT

Impax Environmental Markets plc ("IEM" or "the Company") has
performed well in the first half of 2005.  After a slow start, equity
markets have picked up significantly in May and June.  There has been
a favourable policy and economic backdrop for environmental markets
and companies have generally delivered strong earnings growth leading
to share price out-performance.

Over the interim period from 1 January until 30 June 2005, the MSCI
World Index (priced in Pounds Sterling) rose 5.2%.  The Company's net
asset value ("NAV") valuing the portfolio at bid price increased from
76.1p to 81.3p, an overall rise of 6.8 %. The share price rose 10.1%
from 71.3p at the start of the year to 78.5p on 30 June 2005
representing a narrowing of the discount from 6.3% to 3.4%.  This is
the fourth consecutive six month period that the Company has
outperformed against global markets.

Environmental markets continue to be prominent on the agenda of both
the public and the private sector.  Early in the year, the EU
Emissions Trading Scheme for carbon dioxide allowances came into
operation reflecting strong regional commitment to meet targets
established in the Kyoto Protocol which itself entered into force in
February.  While not a signatory to Kyoto, the US is leading a six
nation "energy and climate pact" to develop and transfer energy
efficiency, renewables and other technologies, and has recently
adopted an energy bill with the specific objective of reducing the
country's dependence on oil from the Middle East.

Energy prices have risen again in 2005, further strengthening the
interest from industry and governments in renewable energy, biofuels
and other alternatives to fossil fuels, as well as energy
efficiency.  Although high energy prices could ultimately constrain
overall economic growth, we believe that such an environment is
broadly favourable for the companies in the Company's portfolio.

Larger companies increasingly recognise the growth potential of
environmental markets as indicated by the launch of General
Electric's "ecomagination" strategy in May.  Against this backdrop,
companies in the IEM universe continue to report positive
expectations and we have seen a continuation of corporate activity
particularly in the water and filtration sector.

The interim period has seen the implementation of several new UK
Financial Reporting Standards which have been issued as a result of
the move towards convergence with International Financial Reporting
Standards.  The main impact to the Company arising from the changes
is that the Company's portfolio is now being valued in its accounts
on a bid price rather than a mid market price basis.  The impact on
NAV arising from the change to bid price valuation as at 30 June 2005
was a reduction of 0.5p per share.

The second half of the year has started well with renewed optimism
about the state of the global economy leading to a broad rise in
equity markets.  As at 9 September 2005 the NAV was higher at 90.7p
while the share price had risen to 93.5p indicating a premium of
3.1%.  The sector growth continues to be driven by a deregulation of
markets, tightening environmental legislation and increased
competitiveness of new technologies while the valuations of the
companies in the portfolio remain attractive.

Your Board is pleased to announce that, in light of the Company's
good performance and in response to both new investor and existing
shareholder demand, it is considering proposals for a further issue
of the Company's ordinary shares (with accompanying warrants). The
proposals, which would be non-dilutive of existing ordinary
shareholders' interests, would require the approval of existing
shareholders. A further announcement will be made by the Company on
this matter in due course.


Richard Bernays
12 September 2005



STATEMENT OF TOTAL RETURN
(incorporating the profit and loss account*)


                    6 months        6       6       6       6       6
                           to months  months  months  months  months
                      30 June      to      to      to      to      to
                         2005 30 June 30 June 30 June 30 June 30 June
                      Revenue    2005    2005    2004    2004    2004
                              Capital   Total Revenue Capital   Total
                        £'000   £'000   £'000   £'000   £'000   £'000

Gains on                    -   2,480   2,480       -   1,543   1,543
investments

Income
  - from                  212       -     212     195       -     195
investments
  - bank interest          11       -      11       5       -       5

Investment               (51)   (155)   (206)    (49)   (149)   (198)
management fees
Transaction costs           -    (23)    (23)       -       -       -
(see note 4)
Other expenses          (132)       -   (132)   (131)       -   (131)

Return on ordinary
activities before
tax                        40   2,302   2,342      20   1,394   1,414

Taxation                 (17)       -    (17)    (16)       -    (16)

Return after
taxation                   23   2,302   2,325       4   1,394   1,398

Transfer to
reserves                   23   2,302   2,325       4   1,394   1,398

Return per Ordinary
Share                                   4.65p                   2.80p



* The revenue column of the statement of total return is the profit
and loss account of the Company.

All capital and revenue items in the above statement derive from
continuing operations.  No operations were acquired or discontinued
during the period.

Return per Ordinary Share is based on 50,000,000 Ordinary Shares in
issue throughout the period.


BALANCE SHEET


                           At 30 June 2005 At 30 June 2004  At 31 Dec
                                     £'000           £'000       2004
                                                                £'000

  Fixed assets
  Investments at market             39,429          33,407     37,774
  value (see note 2)

  Current assets
  Sales for future                     196             509          -
  settlement
  Other debtors                         39              35        157
  Cash at bank and in hand           1,140           1,101        641
                                     1,375           1,645        798

  Current liabilities
  Purchases for future                   -           (414)       (94)
  settlement
  Accrued liabilities                (133)            (94)      (132)
                                     (133)           (508)      (226)


  Net current assets                 1,242           1,137        572

  Total net assets                  40,671          34,544     38,346

  Capital and reserves
  Share capital                      5,000           5,000      5,000
  Share premium                     44,125          44,125     44,125
  Capital reserves                 (8,533)        (14,595)   (10,835)
  Revenue reserve                       79              14         56
  Equity shareholders'              40,671          34,544     38,346
  funds

  Net asset value per
  share

  Net asset value per               81.34p          69.09p     76.69p
  share (see note 3)

  Net asset value per
  share on a portfolio bid          81.34p          68.70p     76.10p
  price valuation basis

  Number of Ordinary            50,000,000      50,000,000 50,000,000
  Shares in issue

  Ordinary Share Price              78.50p          60.25p     71.25p




CASH FLOW STATEMENT


                                             6 months        6 months
                                      to 30 June 2005 to 30 June 2004
                                                £'000           £'000
Operating activities
Net cash flow from operating                     (15)           (157)
activities

Financial investment
Payments to acquire fixed asset               (6,261)         (5,830)
investments
Receipts on disposal of fixed asset             6,791           6,778
investments
Exchange gains & losses                          (16)             (9)

Net cash flow from investing
activities                                        514             939

Net cash flow before financing                    499             782


Increase in cash                                  499             782



NOTES

1              Accounting standards
These interim accounts have been prepared in accordance with
applicable UK accounting standards.  Modifications to UK GAAP as a
result of the issue of new Financial Reporting Standards ("FRS") have
been applied with effect from 1 January 2005 and prior periods have
not been restated.
2              Investments
Securities of companies quoted on regulated stock exchanges are
valued by reference to their market bid prices as at 30 June 2005. In
prior periods, securities were valued at their mid market prices.

3              Net assets per share
Net assets per  share is based  on the number  of ordinary shares  in
issue at the end of the period.

4              Transaction costs
FRS 26: "Financial Instruments: Measurement" requires that where
investments are held at fair value through the profit and loss
account the transaction costs should be recognised as a separate item
from gains and losses on investments.  This has no overall effect on
net assets.  This standard has been applied with effect from 1
January 2005 and prior periods have not been restated.

5              Investment company status
The Company has given notice of its intention to carry on business as
an investment company and it manages its affairs to enable it to
qualify as an investment trust for taxation purposes under section
842 of the Income and Corporation Taxes Act.  The Company therefore
presents its accounts in accordance with the Statement of Recommended
Practice for Investment Trust Companies, with the Statement of Total
Return as its first primary statement.

6              Return per share
Under FRS 27: "Earnings per Share", the Company is only permitted to
show one return per share on the Statement of Total Return.  The
revenue and capital returns per share for the period to 30 June 2005
were 0.05p and 4.60p per share respectively (period ended 30 June
2004: 0.01p and 2.79p per share).

7              Status of this report
These financial statements are not the Company's statutory accounts
for the purposes of section 240 of the Companies Act 1985.  They are
unaudited.  The interim report will be sent to shareholders and
copies will be made available to the public at the registered office
of the Company.

The interim report was approved by the Board on 12 September 2005.

The Company's statutory accounts for the year ended 31 December 2004
received an unqualified audit report and have been filed with the
registrar of companies at Companies House.



SECRETARY, ADMINISTRATOR AND
REGISTERED OFFICE
Cavendish Administration Limited
Crusader House
145-157 St. John Street
London EC1V 4RU




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