Performance at month end

RNS Number : 1926W

Impax Environmental Markets PLC

15 November 2010

 



IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 October 2010 (unless otherwise stated) and unaudited.

DATA AND PERFORMANCE

Pricing
NAV (pence)	128.12
Share price (pence)	116.95
Premium/(discount) (%)	(8.72)
Data
Total fund size (NAV) ( m)		410.2
Market capitalisation (m)		374.5
Management fee (%)		1.0
Established		22nd February 2002
Fund structure		Investment Trust
Number of holdings (including unlisted)		86
Exchange		London
Currency		GBP
ISIN Number		GB0031232498
Sedol		3123249
Reuters RIC code		IMPX.L
Bloomberg code		IEM LN

Performance	IEM Net Asset Value*	MSCI World Global Small Cap**
1 month %	+1.0	+2.5
3 months %	+4.5	+8.3
1 year %	+10.9	+26.6
3 year %	-2.1	+13.3
5 year %	+49.1	+36.2

* Performance data incorporates undiluted NAV until exercise of warrants on 25 June 2010

** Total return

TOP TEN HOLDINGS

Company	Holding %		Description	Country
LKQ	2.6		Value added waste processing	US
Telvent	2.5		Industrial energy efficiency	Spain
Clean Harbors	2.4		Hazardous waste	US
Nibe	2.4		Buildings energy efficiency	Sweden
Regal-Beloit	2.3		Industrial energy efficiency	US
Pall Corp	2.2		Water treatment equipment	US
Nalco	2.2		Water treatment equipment	US
China Longyuan	2.0		Renewable energy developer	China
Vacon	1.9		Industrial energy efficiency	Finland
Itron	1.9		Value added waste processing	China
TOTAL	22.4

PORTFOLIO ANALYSIS*

Geographical US and Canada 36% Japan 5% Europe 37% Australia 3% Asia Ex Japan 13% Cash 6%		Company Size >$2bn 32% $200m-2bn 54% <$200m 4% Unprofitable and  private 4% Cash 6%
Sectoral Energy efficiency 24% Renewable energy 18% Environmental support services 5% Waste management 24% Pollution control 5% Water infrastructure 18% Cash 6%		PE Ratios >20x 25% 15-20x 38% <15% 24% Unprofitable and private 7% Cash 6%

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (31 October 2010)

During the month the Company NAV rose 1.0% compared to the MSCI World Small Cap which rose 2.5%. In Alternative Energy & Energy Efficiency, energy efficiency stocks continued the Q3 trend of outperformance over into October. A recovery in industrial activity and strong demand for energy efficiency cost savings drove the performance of power electronics companies such as LEM Holding (industrial energy efficiency, Switzerland). Zumtobel (buildings energy efficiency, Austria) rose on improving construction data points and Telvent (power network efficiency, US) rose as investors became more confident of the company meeting full year expectations. Wind continued its run of poor performance with Vestas (wind power generation equipment, Denmark) falling as the company posted a weak outlook for 2011 despite Q3 results meeting expectations. Solar stocks such as Trina Solar and Sunpower (China and US respectively) declined as markets grew concerned about the outlook for 2011 and 2012. In Water Treatment and Pollution Control, the announcement of China's 12th 5 year plan and the targeted $500bn spend for the environmental sector drove performance of China Everbright (water and waste infrastructure, China). Nalco (water treatment equipment, US) reported strong Q3 performance, with strong organic sales growth, and Geberit (water infrastructure, Switzerland) rose on improving construction data points. Weaker Q3 results impacted Pentair (water infrastructure, US) whilst GLV (water treatment equipment, Canada) suffered a profit warning as it continued to restructure recent acquisitions. Finally, Kurita (water treatment equipment, Japan) continued to underperform on the strength of the yen. In Waste Technologies and Resource Management, environmental consultants posted the strongest gains as investors have been attracted to cheap valuations and market expectations of recovering earnings. UK environmental consultancy RPS illustrated this view and was driven by a solid interim management statement and M&A speculation. The robust macro outlook in Australia and a strengthening Australian dollar drove performance of Transpacific Industries (diversified waste management, Australia).  Negative performance came from value added recycling companies Lee & Man Paper Manufacturing (value added waste processing, China) and Sims Metal Management (value added waste processing, US) on the back of profit taking and weak Q3 results respectively. Little was achieved at the Tianjin climate summit, held in preparation for the Cancun meeting in December, with the exception of some funding discussions for climate change adaption in developing countries. The first stage of the IPCC reform was implemented with a six year limit to leadership as well as new guidelines for research. China's 12th 5-year plan was announced this month and mentions the development of a domestic carbon trading scheme, whereas the EU ETS is now likely to include the aviation sector in its third phase, post 2012. In renewable energy news, the Czech Republic surprised investors by a retroactive 26% tax on income from large solar PV projects installed in 2009 and 2010, whereas Slovakia abolished its solar subsidies for projects not in place by April 2011. The UK government cut its overall budget sharply in its spending review, but allocated relatively generously towards renewables; £200m for off-shore wind and port infrastructure, £1bn for a Green Investment Bank and £860m for a Renewable Heating Incentive. In the US, renewable projects installed on federal land have taken off for the first time. In Asia, South Korea is planning to spend $36bn by 2015 to build their renewables industry, India is working on establishing a solar project fund funded by a coal tax and China is expected to spend €25bn per year to develop wind power during its 12th 5 year plan. In energy efficiency, China is planning to spend RMB2trn on smart grid development by 2015. In the US, there was an early proposition of raising a levy for developing renewable power lines. The EPA also announced an increase in the maximum ethanol blend from 10% to 15% (E15) for 2007, newer cars and light trucks, as well as proposing fuel efficiency and emissions standards for truck and tractor models from 2014 to 2018. In the waste sector, UK's DEFRA withdrew PFI funding from seven UK waste projects, due to cuts in its own funding resulting from the UK's comprehensive spending review. In the water sector, California will be receiving $274m in federal grants for upgrades to its drinking water and sewer systems. The US is also expected to require an investment of $3.3bn for building and operating new desalination plants, a 191% increase on current spending. In Asia, the Asian Development Bank is planning to issue up to $25bn worth of bonds in the next decade to fund water infrastructure projects in the region.

Latest information available at: http://www.impax.co.uk/funds/listed-equity-funds/impax-environmental-markets-plc

Impax Asset Management Limited

15 Novemeber 2010

 

END

 

 

PFUKKPDNNBDDKDD