Performance at month end

Impax Environmental Markets PLC
05 September 2003

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 August 2003 and unaudited

DATA AND PERFORMANCE


Data                                      Pricing & Performance

Price (pence)                        52.5                         IEM            MSCI         Impax
                                                            Net Asset Value      World         ET50
Total Fund Size (m)                  32.3  Pence (31/08/03)       64.9            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      +9.1%           +3.6%        +7.0%
Number of stocks                       52      3 Months (%)      +18.0%          +9.3%        +12.5%
held
Exchange                           London        1 year (%)      +3.0%           +6.6%        -0.8%
Currency                              GBP  Year to date (%)      +18.7%         +16.3%        +17.3%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
RPS Group                            4.8      Environmental consulting     UK
Veolia Environnement                 4.7      Water & waste                France
Casella Waste                        4.5      Waste disposal & recycling   US
Vestas Wind Systems                  4.2      Wind                         Denmark
Ionics                               3.3      Water treatment              US
Tetra Tech                           3.2      Environmental consulting     US
Tomra                                3.0      Recycling                    Norway
Insituform                           3.0      Sewer repair                 US
Impco Tech                           3.0      Clean engines                US
Wedeco                               2.9      UV disinfection              Germany

                 Total              36.6



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             51%        >£500m                  24%
Europe                    43%        £100-500m               56%
Rest of the World          6%        <£100m                  20%

Sectoral                             Profitability
Energy                    31%        Profitable              84%
Water                     35%        Pre-Profitable          16%
Waste                     32%
Cash                       2%
* of funds invested as of 31 August 2003



MANAGER'S COMMENTARY

The Company NAV increased 9.1% during the month outperforming both the MSCI
World Index and the Impax ET50 which rose 3.6% and 7.0% respectively.   There
was broad strength across most sectors, as economic data improved, and sectors
with an environmental interface (power equipment, industrials, technology) were
particularly strong. Specific developments in Environmental Markets during the
month are discussed below.





The blackout in North America dominated news in the alternative energy sector
last month. Lack of investment in the power transmission network was cited as
the reason behind the failure which affected parts of New York, Detroit,
Cleveland and Toronto. This increased the focus on power management solution
providers such as Itron (meters, US) and  Esco Technologies (meters, US). Also
in the spotlight were the companies offering distributed generation (DG) and
uninterruptible power supply (UPS) solutions such as FuelCell Energy (fuel
cells, US), Capstone Turbines (microturbines, US) and Active Power (flywheels,
US). Meanwhile Ballard Power Systems (fuel cells, Canada) announced that its
Nexa RM series stationary fuel cell generator will be available next year and
Honda announced that it would begin production of its natural gas powered Civic
GX model by the middle of next year - the initial target market for the vehicles
will be California.





The wind sector was also in focus during the month with many of the main turbine
manufacturers reporting results.  The picture was mixed with those smaller
companies most affected by the decline in the German market (NEG Micon, Nordex,
Repower) all reducing guidance for the rest of the year.  Meanwhile the largest
company Vestas outstripped expectations and raised sales and margin guidance for
the rest of the year thus confirming its leadership position in the market.  At
the policy level, a draft of the amended German renewable energy law (EEG) was
published by the German Environment Ministry last month - the legislation will
reduce the fixed price paid for wind power by 0.5 eurocents/kWh but increases
the price paid for solar power. In the US, the blackout also prompted increased
activity in the Senate during the month with the US President encouraging
differences in the content of the Energy Bills passed by the House and the
Senate to be resolved as a matter of urgency. The final Bill is likely to
include an increased emphasis in energy efficiency and an extension to the
Production Tax Credit (PTC) incentive for wind farm developers.





In the water sector, the UK industry regulator OFWAT published its annual
performance review. The review highlighted the challenge facing the water
utilities in meeting the requirements of the current environmental programme by
the end of the compliance period (2005). Increased capital spending should
benefit the water technology providers such as Wedeco (UV systems, Germany),
Trojan Technologies (UV systems, Canada) and Hydro International (stormwater
management, UK) - each of these companies reported stronger than expected
results during the month. Meanwhile, following record quarterly results, Zenon
Environmental (membranes, Canada) announced that the company has finalised an
agreement with Maytag Canada to distribute Zenon's HomespringTM ultrafiltration
unit to residential customers. Cuno (membranes, US) and Domnick Hunter
(filtration, UK) also reported strong quarterly results during the month.





There was mixed news from the waste sector during the month. Amongst the
companies Seche Environnement (waste management, France) and Arcadis
(environmental consulting, Netherlands) both reported disappointing quarterly
results while Mayr-Melnhof (recycled packaging, Austria) reported steady results
for the first half of 2003. The UK Government published its annual Municipal
Waste Management survey last month indicating that the proportion of municipal
waste sent to landfill decreased 2% while the recycling rate continue to
improve.  Finally, Tomra (recycling systems, Norway) received its first order
for reverse vending machines to be used in Germany - the customer was not German
(Netto, Denmark) and the order was small (12 MNOK) but it represents an
important step in the development of the deposit scheme in Germany.




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



5 September 2003


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