Performance at month end

Impax Environmental Markets PLC
06 February 2003

IMPAX ENVIRONMENTAL MARKETS plc



All information is at 31 January 2003 and unaudited



DATA AND PERFORMANCE


Data                                      Pricing & Performance
Price (pence)                        44.0                         IEM            MSCI         Impax

                                                            Net Asset Value      World         ET50
Total Fund Size (m)               GBP25.9  Pence (31/01/03)       51.7            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      -5.1%           -5.1%        -6.9%
Number of stocks                       50      3 Months (%)      -6.0%           -7.8%        -11.1%
held
Exchange                           London        1 year (%)        na           -32.1%        -47.9%
Currency                              GBP  Year to date (%)      -5.1%           -5.1%        -6.9%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                         Holding %     Description                  Country
Vivendi Environnement                 6.8     Water & Waste                France
RPS Group                             4.4     Environmental Consulting     UK
Wedeco                                4.3     Water                        Germany
Ionics                                3.9     Water                        US
Casella Waste                         3.8     Waste Disposal & Recycling   US
Waste Recycling                       3.2     Waste Disposal & Recycling   UK
Newalta                               3.1     Waste Oil Recycling          Canada
Kurita Water                          3.1     Water                        Japan
Tomra Systems                         3.1     Recycling                    Norway
Vestas Windsystems                    3.0     Wind                         Denmark
                 Total               38.7



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             44%        >£500m                  20%
Europe                    51%        £100-500m               52%
Rest of the World          5%        <£100m                  28%

Sectoral                             Profitability
Energy                    29%        Profitable              88%
Water                     35%        Pre-Profitable          12%
Waste                     31%
Cash                       5%
* of funds invested as of 31 January 2003



MANAGER'S COMMENTARY


The Company NAV fell 5.1% during the month compared with the MSCI World Index which also fell 5.1% and a decline
of 6.9% in the Impax ET50. The key developments in Environmental Markets during January are discussed below.



In the alternative energy sector last month, there were positive developments in the US with President Bush
launching a $1.2 billion Freedom Fuel Initiative in his State of the Union address. The funding will be used to
support private companies in developing fuel-cell vehicle technologies and in developing the   refuelling
infrastructure. The fuel cell manufacturers with an automotive focus such as Ballard Power Systems (fuel cells,
Canada), Hydrogenics (fuel cells, Canada) and Quantum Technologies (hydrogen storage, US) may all benefit from
the five-year funding programme.



In the wind sector, the wind turbine manufacturers endured another difficult month following a profits warning
from NEG Micon (wind turbines, Denmark) with the company suffering from last-minute delays to two key orders. On
a more positive note the company is currently bidding against Vestas Windsystems (wind turbines, Denmark) for
the EPC contract for the 160+MW Solway Firth offshore wind project off the coast of the UK. If successful, the
contract will allow NEG to roll out its new 2.75MW NM92 turbine which is seen as a direct competitor to Vestas'
3MW V90 machine. Following reports that growth in the German and Spanish wind markets has eased and with the US
wind industry currently on hold prior to a further extension to the PTC expected in the Energy Bill later his
year, the focus has shifted to the onshore market in France and the offshore industry in the UK, where all the
key turbine manufacturers and developers are currently positioning themselves.



The decision by Suez, a global utility outside the Environmental Markets universe, to terminate its $20m per
annum contract with the City of Atlanta as part of the company's new strategic 'action plan' dominated the news
in the water sector last month. Whilst the move has illustrated the issues associated with  pricing long-term
service contracts, it has also highlighted the scale of the investment required in the US to upgrade the
municipal water infrastructure to the standard demanded by the regulator. With over 1000 public-private
partnerships currently operating in the US water sector, the trend towards outsourcing seems set to continue and
contracts such as the $200m biosolids contract awarded to US Filter, a subsidiary of Vivendi Environnement
(water & waste, France), by the city of Atlanta last year reiterate the importance of the private sector in
meeting this long-term capital investment programme.  Also in the US, a Water Quality Trading Policy was
launched by the US EPA which will allow individual States to implement tradable pollution permit systems. The
system should enable companies to meet targets cost-effectively whilst incentivising capital investment in water
treatment technologies. During the month one of the leading solution providers, Zenon Environmental (membranes,
Canada), was selected by Gwinnett County, Georgia in the US to supply its proprietary ZeeWeed(R) technology to a
water reclamation and processing facility in a contract worth CD$30million.



Corporate activity dominated the UK waste sector last month with Waste Recycling Group (waste, UK) announcing
that the company was in discussions with a potential acquirer. It later emerged that the private equity house
Candover Investments plc has been in talks with the company although the timetable for a deal is as yet
uncertain. In Germany, Tomra Systems (reverse vending, Norway) continued its roller coaster ride through the
judicial review process for  acceptance of its reverse vending technology. The company made significant gains
earlier in the month as the introduction of the systems became law but  suffered as a result of a decision by
the AGVU Working Group for packaging and the environment to integrate different recognition software into the
reverse vending systems rather than recommend self-contained units made by single manufacturers.  The
implications will become clear in the next couple of months but it is anticipated that Tomra's volumes and
margins will be below previous expectations.  In the US, Casella Waste (waste disposal & recycling, US)
completed its balance sheet restructuring and re-capitalisation with a successful high-yield bond offering.



Latest information available at: www.impax.co.uk/asset/iemdown.htm



6 February 2003


                      This information is provided by RNS
            The company news service from the London Stock Exchange