Performance at month end

RNS Number : 9772F

Impax Environmental Markets PLC

22 January 2010

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 December 2009 (unless otherwise stated) and unaudited.

DATA AND PERFORMANCE

Data		Pricing and Performance
Share price (pence)	119.1		IEM Net Asset Value	MSCI World Small Cap*
Warrants (pence)	21.5
Total fund size (m)	GBP 391.5	Diluted NAV (pence)	126.51	n/a
Market capitalisation (m)	GBP 363.2	Premium/discount (%)	-7.2
Management fee (%)	1.0	Undiluted NAV (pence)	128.38
Established	22 February 2002	Performance**
Fund structure	Investment Trust	1 month (%)	+6.5	+6.2
Number of holdings (including unlisted)	100	3 months (%)	+4.2	+2.1
Exchange	London	1 year (%)	+29.9	+30.6
Currency	GBP	3 years (%)	+14.8	+3.6
ISIN number	GB0031232498	5 years (%)	+67.8	+38.4
Sedol	3123249
Reuters RIC code	IMPX.L	* Performance data is in Total Return. ** Performance data is for undiluted NAV.
Bloomberg code	IEM LN

TOP TEN HOLDINGS

Company	Holding %	Description	Country
China Everbright	2.5	Value added waste processing	China
Telvent	2.5	Utility software	US
Itron	2.4	Automated meter reading	US
Pall Corp	2.3	Water treatment equipment	US
Abengoa	2.1	Biofuels	Spain
Clean Harbors	2.1	Hazardous waste	US
Ormat	2.1	Geothermal	US
LKQ Corp	2.0	Value added waste processing	US
Shanks	2.0	General waste management	UK
Chloride	2.0	Power network efficiency	UK
TOTAL	22.0

PORTFOLIO ANALYSIS*

Geographical		Company Size
US and Canada	36%	>$2bn	18%
EU and EFTA	43%	$200-2bn	69%
Rest of the World	19%	<$200m	11%
Cash	2%	Cash	2%

Sectoral		PE ratios
Energy	48%	PER >20x	33%
Water	19%	PER 15-20x	35%
Waste	31%	PER <15x	23%
Cash	2%	Unprofitable	7%
		Cash	2%
* of funds invested as of 31 December 2009

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (December 2009)

During the month the Company NAV increased by 6.5% compared to the MSCI World Small Cap which increased by 6.2%.

In Alternative Energy & Energy Efficiency, improved visibility of stimulus fund flows to the Automated Meter Reading sector drove a 13% rise of Itron's (advanced metering, US) share price. Following a November placing, and strong Q3 Telvent (utility software, US) rose 19% during December. Sunpower (solar, US) rose 18% following a statement to the market suggesting no further negative developments in relation to accounting irregularities at a subsidiary. In Water Treatment & Pollution Control, the relative weakness of the Yen prompted improved sentiment in investing in Japan, benefitting Horiba (testing and monitoring, Japan) up 17%. China Everbright (water and waste infrastructure, Hong Kong) rose 11% following project announcements. Pall (filtration, US) rose 15% following a positive guidance statement. In Waste Technologies & Resource Management, Shanks (waste management, UK) rose 60% following an unsolicited takeover bid. Positive driving data from the US, and deteriorating weather conditions benefitted LKQ (recycled auto parts, US) up 15%. Underperformance came from wind turbine manufacturers Vestas (Denmark) and Gamesa (Spain) following continued uncertainty regarding the timing and extent of market growth. In the hazardous waste sector investors took profit in Stericycle (US) following good performance.

The UN Conference in Copenhagen ended without securing a global deal on tackling climate change. Following two weeks of intense negotiations, world leaders 'noted' an expression of aims in the 'Copenhagen Accord', providing a framework for further discussion in 2010. Notable amongst these were: limiting global temperature rise to 2 degrees C; a recognition that $100bn pa by 2020 is needed to help poor nations reduce emissions; 'Annex 1' parties will submit emission reduction targets for 2020 by the end of Jan 2010; developing nations will commit to mitigation efforts. It is hoped that much of the detail will be ironed out in 2010, so that these headline goals can be translated into national policies. Despite the lack of a complete deal, Copenhagen was the first time that the US, China and other emerging markets came to the negotiating table with commitments to tackle climate change, representing a significant step towards consensus that can be built upon in the coming months. Outlook remains positive based on continued legislative momentum backed by stimulus funding, much of which should flow in 2010. A re-emergence of M&A in the environmental sector should also contribute to performance.