Performance at month end

RNS Number : 8305S

Impax Environmental Markets PLC

16 September 2010

 



IMPAX ENVIRONMENTAL MARKETS plc

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

DATA AND PERFORMANCE

Pricing
NAV (pence)	117.68
Share price (pence)	107.05
Premium/ (discount) (%)	(9.03)
Data
Total fund size (NAV) ( m)		379.6
Market capitalisation (m)		345.1
Management fee (%)		1.0
Established		22nd February 2002
Fund structure		Investment Trust
Number of holdings (including unlisted)		92
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 %	-4.0	-2.8
3 months %	-7.9	-7.3
1 year %	+3.6	+14.3
3 year %	-5.0	+5.7
5 year %	+30.4	+23.0

* Performance data is for undiluted NAV ex income

** Total return

TOP TEN HOLDINGS

Company	Holding %		Description	Country
Chloride Group	2.7		Power network efficiency	UK
Pall Corp	2.5		Water treatment equipment	US
LKQ	2.4		Value added waste processing	US
Clean Harbors	2.4		Hazardous waste	US
Ormat	2.3		Renewable energy developers	Israel/US
Telvent	2.1		Industrial energy efficiency	Spain
Nibe	2.1		Buildings energy efficiency	Sweden
China Everbright	2.1		Value added waste processing	China
Nalco	2.1		Water treatment equipment	US
Horiba	2.1		Environmental testing and gas sensing	Japan
TOTAL	22.8

PORTFOLIO ANALYSIS*

Geographical		Company Size
US and Canada	35%	>$2bn	31%
EU and EFTA	40%	$200-2bn	59%
Rest of the World	22%	<$200m	7%
Cash	3%	Cash	3%
Sectoral		PE ratios
Energy	46%	PER >20x	26%
Water	23%	PER  15-20x	27%
Waste	28%	PER <15x	41%
Cash	3%	Unprofitable	3%
		Cash	3%
* of funds invested as of 31 August 2010

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (August 2010)

During the month the Company NAV fell 4.0% compared to the MSCI World Small Cap which fell 2.8%. In Alternative Energy & Energy Efficiency strong Q2 results drove share price increases for the following top three performing alternative energy & energy efficiency stocks. Polypore (battery membranes, US) beat on top line and margins. Renesola (solar, US) published aggressive plans to reduce manufacturing costs, multiple contract announcements and improving outlook for 2011 demand and pricing. LEM's (power electronics, Switzerland) results were driven by recovery in industrial business, turnaround in the automotive business and strong activity in renewables. Wind turbines manufacturers Vestas (Denmark) and Gamesa (Spain) both issued a profit warning. Vestas Q2 results included a material downgrade for the full year in top line and margin, driven by delayed industrial recovery and an increase in new US manufacturing facilities. Gamesa's Q2 results included a downgrading for the full year guidance. The stock was also weak on concerns over Gamesa's market position due to ageing technology, wrong geographic exposure and the lack of a product for the offshore market. In Water Treatment and Pollution Control, the sector underperformed during the month due to exposure to the construction market. Spice Holdings (outsourced utility services, UK) performed well on M&A activity and Flurida (water infrastructure, Spain) announced good H1 results which exceeded expectations. Mueller Water (water infrastructure, US) was weak due to a Q2 earnings miss and weakening US construction statistics and investor aversion to indebted companies. Pall Corporation (filtration, US) was negative on fears of a broad based industrials slowdown. In Waste Technologies and Resource Management, August was a weak month for waste management companies, relative outperformance was very stock specific, and was based on gradual recoveries in volume. Tomra (waste infrastructure, Norway) performed well on strong Q2 results and a big contract win for reverse vending machines in Germany. Stericycle (medical waste, US) helped performance on its strong market position and defensive characteristics. Lassila (waste management, Finland) was strong after completing its planned turnaround.  Metallico (metals recycler, US) was weak on marco concerns of global growth, low volumes of scrap and a decline in commodity prices. RPS (environmental consultant, UK) was down following downgrades after H1 results, and concerns over government budgets. Daiseki (hazardous waste, Japan) performed poorly due to the aversion of investors to Japanese equities driven by the strengthening yen along with concerns over the outlook for Japanese industry. In the US, Senate Majority Leader Harry Reid did not bring his oil spill bill to the Senate floor for a vote before the August recess. The legislation had little chance of passing, as several Democrats and all the Senate's Republicans would have voted against the bill. Australia could accelerate action on climate change after independent and Green MPs, who saw their national vote double to 12 per cent, won the balance of power in elections that left a hung parliament. An inquiry into the UN's IPCC by the world's scientific community regarding reporting errors has called for an overhaul of the panel's management. In renewable energy news Spain released a statement declaring the exact cuts in solar premiums for roof installations. The French government announced a reduction in tariffs for large solar installations with a cap of 500MW per year. France also announced it will seek bids for 3,000 megawatts of offshore wind farms. Germany increased its targets for electricity derived from renewable sources to 38.6% by 2020. In the UK the government eliminated regulation that prevents local councils from selling excess renewable electricity to the grid. In energy efficiency news the State Grid Corporation of China (SGCC) announced plans to spend $40bn between 2011and 2015, for the construction of ultra-high-voltage transmission lines. The Japanese government plans to subsidise domestic plants producing clean-energy and energy-efficient goods whilst in India the government will soon set fuel efficiency standards for vehicles under the Energy Conservation Act. The Energy Technologies Institute in the UK has launched a £3m residential buildings energy efficiency project in order to help achieve targets on carbon dioxide emission cuts.  In waste management news the average price to bury a ton of municipal solid waste in a US landfill has reached a record high, continuing to make recycling and other waste technologies a more attractive alternative. Chinese investment in solid waste treatment and waste-to-energy development is expected to increase by 18% over the next ten years. Finally in water news North American cities and towns will spend $80bn to upgrade and expand municipal wastewater treatment facilities over the next 5 years, representing 15% of global spending for this sector.

Latest information available at: http://www.impax.co.uk/impax/funds/listed_funds/environmental_plc/

Impax Asset Management Limited

16 September 2010

 

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