Performance at month end

Impax Environmental Markets PLC
05 March 2003

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 28 February 2003 and unaudited

DATA AND PERFORMANCE


Data                                      Pricing & Performance

Price (pence)                        43.5                         IEM            MSCI         Impax
                                                            Net Asset Value      World         ET50

Total Fund Size (m)              GBP 24.3  Pence (28/02/03)       48.6            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      -5.9%           +2.4%        -2.4%
Number of stocks                       50      3 Months (%)      -17.6%         -10.8%        -19.4%
held
Exchange                           London        1 year (%)      -50.4          -30.0%        -48.7%
Currency                              GBP  Year to date (%)      -11.0%          -2.9%        -9.1%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                        Holding %      Description                  Country

Vivendi Environnement                5.7      Water & Waste                France
RPS Group                            5.0      Environmental Consulting     UK
Wedeco                               4.6      Water                        Germany
Ionics                               4.0      Water                        US
Kurita Water                         3.5      Water                        Japan
Casella Waste                        3.4      Waste Disposal & Recycling   US
Newalta                              3.0      Waste Oil Recycling          Canada
Hydrogenics                          3.0      Fuel Cells                   Canada
Waste Recycling                      2.9      Waste Disposal & Recycling   UK
BWT                                  2.9      Water Treatment              Austria
                 Total              38.0


PORTFOLIO ANALYSIS*

Geographical                         Company Size
North America             46%        >£500m                  15%
Europe                    49%        £100-500m               60%
Rest of the World          5%        <£100m                  25%

Sectoral                             Profitability
Energy                    27%        Profitable              87%
Water                     36%        Pre-Profitable          13%
Waste                     33%
Cash                       4%
* of funds invested as of 28 February 2003



MANAGER'S COMMENTARY

The Company NAV fell 5.9% during the month compared with the MSCI World Index
which increased 2.4% and a decline of 2.4% in the Impax ET50. This was a
disappointing month with a number of companies that have performed well in
recent months giving up their gains and further share price weakness from the
wind sector. The key developments during the month are shown below.

In the alternative energy sector, the UK was in focus during the month with the
release of the Energy White Paper. Although the Paper lacks concrete long-term
(2020) renewable energy targets it does reinforce the UK Government's commitment
to pursue renewable energy as a viable and acceptable alternative to fossil
fuels. Among the incentives included in the Paper was an additional £60 million
of capital grants to partially finance new renewable energy projects. With
further offshore wind leases currently under discussion, the wind turbine
manufacturers and developers (Vestas, NEG Micon, GE Wind, Nordex, Enercon) all
look set to benefit from this incentive. Unfortunately other news from these
companies was not so positive during the month, with the wind turbine
manufacturers reporting pressure on margins following the slowdown in the German
market and delays to the US Energy Bill. Nordex (wind turbines, Germany) and NEG
Micon (wind turbines, Denmark) both downgraded expectations for 03 with cautious
growth predictions for the German and US markets.

On a more positive note, companies working on cleaner engines including Ballard
Power Systems (fuel cells, Canada), Ricardo (clean engines, UK) and Westport
Innovations (natural gas engines, UK), continue to deliver in-line with
expectations and cooperate effectively with the Original Equipment Manufacturers
(OEMs) who have shown willingness to invest in cleaner, more efficient engines
despite a general weakness in the global automotive sector. Energy efficiency
improvements and tighter emissions regulations continue to drive this investment
with large automobile manufacturers such as General Motors continuing to develop
in-house expertise through cooperation agreements with environmental technology
companies. During the month GM successfully tested their latest high-pressure
hydrogen storage system that has been developed in collaboration with Quantum
Technologies (fuel cells, US). The system should increase the range of GM's
HydroGen3 fuel cell vehicle by up to 70%. Westport Innovations Inc. (natural gas
engines, Canada) signed an agreement with MAN Nutzfahrzeuge AG, a German
commercial vehicle manufacturer, to identify and exploit opportunities for MAN
engines equipped with Westport-CycleTM technology.

In the water sector last month, GE Speciality Materials completed its
acquisition of Osmonics (membranes, US). GE Osmonics will now operate alongside
GE Betz within the GE Speciality Materials' water and process technologies
business. In Austria, BWT (water treatment, Austria) won a US$7 million order
for a water purification system to be installed in a semiconductor manufacturing
facility in Switzerland. Although the size and value of the order was small, any
sign of an upturn in capital spending in the electronics industry is positive
for the ultrapure water technology providers such as BWT, Ionics (water
treatment, US) and Kurita Water Industries (water treatment, Japan). Also in
Japan, plans to revise the Local Autonomy Laws governing outsourcing of local
government contracts for the management of water facilities should provide an
opportunity for increased private sector involvement in water supply and
treatment.

Corporate activity continued to provide the focal point of news flow in the
waste sector last month with Tetra Tech (US, environmental consultancy)
announcing the acquisition of Foster Wheeler's environmental division for US$80
million. The move should strengthen the company's resource management
capabilities as stricter environmental regulations continue to bite in North
America and Europe. Also in the US, bottle deposit bills have again been in
focus with discussion ongoing in four separate states over the introduction of a
bottle deposit scheme. This may prove positive for the technology providers such
as Tomra Systems (reverse vending, Norway). In Europe, the waste electrical and
electronic equipment (WEEE) Directive, and its sister Directive on the
Restriction of Hazardous Substances (RoHS), was formally adopted during the
month with EU Member States obliged to implement the regulations by 13th August
2004. The UK has until September 2005 to introduce take-back systems and
collection facilities for all types of electrical and electronic equipment.

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

5 March 2003


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