Final Results

Preliminary announcement of results of Impax Environmental Markets
plc for the year ended 31 December 2006


CHAIRMAN'S STATEMENT

I am delighted to report that 2006 was the fourth consecutive year of
good performance for Impax Environmental  Markets plc ("IEM" or  "the
Company").  As the fundamentals of the alternative energy, water  and
waste sectors continued to strengthen, many companies active in  this
space were  able  to  deliver superior  earnings  growth,  and  their
shareholders were rewarded with  attractive returns.  Meanwhile,  the
Company continued to  benefit from  the desire of  many investors  to
seek exposure to these sectors through an actively managed  portfolio
and an additional  £66 million  was raised  through a  C share  issue
during the year.

Performance and Current Status
During the year, the Company's  net asset value ("NAV") per  Ordinary
Share (taking into  account the  dilution effect of  the warrants  in
issue) rose by 19.4% from 92.6p  to 110.6p, while the Ordinary  Share
price rose  22.6%  from 94.0p  to  115.3p.   This  result  represents
another year of out-performance  versus global markets: for  example,
over the same time period the MSCI World and the MSCI World Small Cap
Indices  (priced  in   Pounds  Sterling)  rose   by  3.6%  and   1.7%
respectively.

Since the Company  was established  in February 2002,  the number  of
"pure play" Environmental Markets stocks  has more than doubled,  and
the aggregate market capitalisation now stands at over £150 billion.
I am  particularly encouraged  that  many of  the trends  and  themes
identified by the Manager  have become mainstream.   During the  year
the Company made its first  investments in unquoted investments,  and
the Manager expects to increase the exposure in this area to 6-7  per
cent. of the Company's net assets.  Investments will only be made  in
unquoted companies which  appear to  be candidates  for flotation  or
sale.

Financial results
As in previous years, the Company's dividend income was low as
portfolio companies have been investing free cash flow to support
business development.  However, the Company received higher than
normal bank interest income during the year, which was earned while
the cash proceeds of the C Share issue were being invested.  As a
result, the Company's net revenue after tax was 0.2p per share, which
was higher than in previous years and, in order to retain its
investment trust status, the Company is therefore required to pay a
small final dividend.  It should not, however, be assumed that a
dividend will be paid in future years.

The directors recommend a final dividend of 0.2p per Ordinary Share,
which, if approved at the Company's Annual General Meeting, will be
paid to shareholders on the register as at the close of business on
13 April 2007.

C Share Issue
As I reported at the interim stage, in August the Company raised  £66
million in a placing and offer for subscription of C shares that  was
sponsored by Dresdner Kleinwort.   In October,  when the Manager  had
invested 90 per  cent of the  proceeds, the C  shares were  converted
into ordinary shares in accordance with the terms of the issue.  This
latest share  issue  together  with the  strong  performance  of  the
underlying portfolio  meant that  the Company's  net assets  exceeded
£200 million.

I  believe  that  this  further  expansion  has  been  beneficial  to
shareholders, particularly in creating a  larger base over which  the
Company can  spread  its fixed  costs.  Furthermore, there  has  been
evidence that the liquidity of the Company's shares has increased.

I am also pleased to report that the C share issue does not appear to
have affected  the premium  at which  the Company's  ordinary  shares
trade with respect to NAV.  This premium was 1.4% at the start of the
year, increased  to  4.1%  at  the end  of  the  Interim  Period  and
continued to rise, ending the year at 4.4%.

Outlook
At the time of writing, the Company's good performance is continuing.
On 23   March 2007 the  Company's NAV had  risen by 5.1%   since  the
start of the year, while the share price had risen by 2.4%. The  MSCI
World Index has risen by 2.6% over the same period.

This year I  would like  to make a  special mention  of the  shifting
global attitudes to climate change  and the potential impact that  it
may have for  the IEM portfolio.   During the  last twelve months  we
have seen further recognition from economists (eg the Stern  Report),
scientists (eg the Intergovernmental Panel on Climate Change, "IPCC")
and policy  makers  including those  in  the United  States  (eg  the
Regional Greenhouse Gas  Initiative) that  climate change  is a  real
problem  that  requires  urgent  action.    As  global  measures  are
implemented both to mitigate  and adapt to  climate change, I  expect
opportunities to  be  created  for  many  of  the  companies  in  the
Company's portfolio.

Beyond this issue, the  underlying drivers for Environmental  Markets
in  the  form  of  market  liberalisation,  tightening  environmental
legislation and increased competitiveness of new technologies  remain
as strong as ever and, as indicated in the Manager's report, the  IEM
portfolio companies continue to  perform well, typically matching  or
exceeding expectations for  earnings and growth.   As a  consequence,
the directors  believe  that  the outlook  for  the  Company  remains
positive.


Richard Bernays
27  March 2007

INCOME STATEMENT
For the year ended 31 December 2006


                                                      2006                    2005
                                              Revenue Capital Total   Revenue Capital Total
                                              £'000   £'000   £'000   £'000   £'000   £'000
Gains on
investments
- realised                                       -     9,074   9,074     -     2,147  2,147
- unrealised                                     -    25,507  25,507     -     7,862  7,862
Income                                         1,427     -     1,427    506      -     506
Investment management fee                      (439)  (1,321) (1,760)  (134)   (404)  (538)
Other expenses                                 (554)     -     (554)   (306)     -    (306)
Return on ordinary activities before            434   33,260  33,694    66     9,605  9,671
taxation
Taxation                                       (78)      -     (78)    (24)      -     (24)
Return on ordinary activities after             356   33,260  33,616    42     9,605  9,647
taxation

Return per ordinary share - undiluted          0.23p  21.67p  21.90p   0.07p  15.76p  15.83p
Return per ordinary share - diluted            0.23p  21.37p  21.60p   0.07p  15.76p  15.83p



The total column is the profit and loss account of the Company.

All revenue  and capital  items in  the above  statement derive  from
continuing operations.

No operations were acquired or discontinued during the year.
A Statement of Total Recognised Gains and Losses has not been
presented as all gains and losses are recognised in the Income
Statement.

BALANCE SHEET
At 31 December 2006


                                                   2006          2005

                                                  £'000         £'000

FIXED ASSETS
Investments at fair value through profit        219,994       104,241
or loss

CURRENT ASSETS
Income receivable                                    68            26
Sales - future settlements                        1,462           320
Taxation recoverable                                 56            12
Other debtors                                        43            31
Cash at bank and in hand                          4,066         4,135
                                                  5,695         4,524

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE
YEAR
Purchases - future settlements                    (735)       (1,580)
Accrued liabilities                               (513)         (242)
                                                (1,248)       (1,822)


NET CURRENT ASSETS                                4,447         2,702


TOTAL NET ASSETS                                224,441       106,943

CAPITAL AND RESERVES: EQUITY

Share capital                                    20,036        11,555
Share premium account                           127,796        52,395
Share purchase reserve                           44,125        44,125
Realised capital reserve                        (1,535)       (9,288)
Unrealised capital reserve                       33,565         8,058
Revenue reserve                                     454            98
SHAREHOLDERS' FUNDS                             224,441       106,943

Net assets per Ordinary Share - undiluted       112.02p        92.55p

Net assets per Ordinary Share - diluted         110.58p        92.55p

Number of ordinary shares in issue          200,356,027   115,549,454




RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS


For the year ended 31 December 2006



                         Share    Share Realised Unrealised
                Share  Premium Purchase  Capital    Capital Revenue
              Capital  Account  Reserve  Reserve    Reserve Reserve   Total
                £'000    £'000    £'000    £'000      £'000   £'000   £'000

Opening        11,555   52,395   44,125  (9,288)      8,058      98 106,943
shareholders'
funds
As at 1
January 2006
Shares issued   8,151   73,754        -        -          -       -  81,905
during the
year
Exercise of       330    2,834        -        -          -       -   3,164
warrants
Share issue         -  (1,187)        -        -          -       - (1,187)
expenses
Profit for          -        -        -    7,753     25,507     356  33,616
the year
Closing        20,036  127,796   44,125  (1,535)     33,565     454 224,441
shareholders'
funds
As at 31
December 2006



For the year ended 31 December 2005



                           Share    Share Realised Unrealised
                  Share  Premium Purchase  Capital    Capital Revenue
                Capital  Account  Reserve  Reserve    Reserve Reserve   Total
                  £'000    £'000    £'000    £'000      £'000   £'000   £'000

  Opening         5,000        -   44,125 (11,031)        196      56  38,346
  shareholders'
  funds
  as at 1
  January 2005
  Shares issued   6,555   53,445        -        -          -       -  60,000
  during the
  year
  Share issue         -  (1,050)        -                   -       - (1,050)
  expenses
  Profit for          -        -        -    1,743      7,862      42   9,647
  the year
  Closing        11,555   52,395   44,125  (9,288)      8,058      98 106,943
  shareholders'
  funds
  as at 31
  December 2005


CASH FLOW STATEMENT
For the year ended 31 December 2006



                                                     2006        2005
                                                    £'000       £'000

OPERATING ACTIVITIES

Cash inflow from investment income and bank         1,397         495
interest
Cash outflow from management expenses             (2,188)       (660)
Cash inflow from disposal of investments           52,504      51,793
Cash outflow from purchase of investments       (135,531)   (106,913)
Cash outflow from foreign exchange costs            (132)       (171)

NET CASH FLOW FROM OPERATING ACTIVITIES          (83,950)    (55,456)

FINANCING
Proceeds of share issues                           85,068      60,000
Expenses of share issues                          (1,187)     (1,050)
NET CASH INFLOW FROM FINANCING                     83,881      58,950


(DECREASE)/INCREASE IN CASH                          (69)       3,494


                                                     2006        2005
                                                    £'000       £'000
Opening balance                                     4,135         641
Cash (outflow) / inflow                              (69)       3,494
Balance at 31 December 2006                         4,066       4,135




NOTES
1. The preliminary announcement was approved by the Board on 27 March
2007.

2. These accounts have been prepared using the accounting standards
and policies of the previous year end.

The accounts have been presented in accordance with the Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies" ("SORP") issued by the AIC issued in December 2005.

3. Undiluted return per share is based on the net return on ordinary
activities after taxation of £33,616,000 (2005: £9,647,000)
attributable to the weighted average of 153,477,613 (2005:
60,954,841) Ordinary Shares of 10p in issue during the year.  The
weighted average has been adjusted for the effect of the C share
issue and conversion during the year.  Diluted return per ordinary
share is based on the net return on ordinary activities after
taxation of £33,616,000 (2005: £9,647,000) attributable to the
diluted weighted average of 155,607,810 (2005: 60,954,841) Ordinary
Shares in issue during the year.  Dilution is due to the Warrants in
issue during the year.

4. Undiluted net assets per Ordinary Share is based on net assets of
£224,441,000 (2005: £106,943,000) divided by 200,356,027 (2005:
115,549,454) Ordinary Shares in issue at the Balance Sheet date.
 Diluted net assets per Ordinary Share is based on diluted net assets
of £243,463,000 (2005: £106,943,000) divided by 220,170,409 (2005:
115,549,454) diluted Ordinary Shares in issue at the Balance Sheet
date.  Dilution is due to the Warrants in issue at the year end.

5. Dividend
The directors propose that the Company will pay a final dividend of
0.2p per Ordinary Share.  If approved at the Annual General Meeting
the dividend will be paid on 10 May 2007 to shareholders on the
register at the close of business on 13 April 2007.

6. Financial information
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 December 2006 as
defined by section 240 of the Companies Act 1985.  The financial
information for 2006 is derived from the statutory accounts for 2006,
which will be delivered to the registrar of companies following the
company's Annual General Meeting.  The auditors have reported on the
2005 accounts; which have been delivered to the registrar; their
report was unqualified and did not include a statement under Section
237(2) or (3) of the Companies Act 1985.

7. The Annual General Meeting will be held on 3 May 2007 at 10 a.m.
at 145-157 St. John Street, London, EC1V 4RU.


27 March 2007

Secretary and registered office:
Cavendish Administration Limited
145-157 St John Street
London
EC1V 4RU

Tel: [phone]

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