Performance at month end

Impax Environmental Markets PLC
08 October 2003


IMPAX ENVIRONMENTAL MARKETS plc



All information is at 30 September 2003 and unaudited



DATA AND PERFORMANCE


Data                                      Pricing & Performance   
                                                                  IEM            MSCI         Impax
Price (pence)                          55                   Net Asset Value      World         ET50      
Total Fund Size (m)                  31.5  Pence (30/09/03)       63.0            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)       -3%            -4.3%        -3.8%
Number of stocks                       50      3 Months (%)      +12.4%          +3.7%        +8.4%
held
Exchange                           London        1 year (%)      +18.8%         +16.6%        +14.9%
Currency                              GBP  Year to date (%)      +15.2%         +11.3%        +12.8%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
RPS Group                            5.2      Environmental consulting     UK
Casella Waste                        4.3      Waste disposal & recycling   US
Vestas Wind Systems                  4.0      Wind                         Denmark
Ionics                               3.5      Water treatment              US
Veolia Environnement                 3.4      Water & waste                France
Tetra Tech                           3.1      Environmental consulting     US
Impco Tech                           3.0      Clean engines                US
Hydrogenics                          2.9      Fuelcells                    Canada
Kurita                               2.8      Water treatment              Japan
Insituform                           2.8      Sewer repair                 US

                 Total              35.0



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             55%        >£500m                  23%
Europe                    39%        £100-500m               51%
Rest of the World          6%        <£100m                  26%

Sectoral                             Profitability
Energy                    30%        Profitable              84%
Water                     34%        Pre-Profitable          16%
Waste                     32%
Cash                       4%
* of funds invested as of 30 September 2003








MANAGER'S COMMENTARY


The Company NAV decreased 3.0% during the month compared with the MSCI World
Index and the Impax ET50 which fell 4.3% and 3.8% respectively.   It was a
volatile month and the Company rose 4.5% before falling back in line with global
stockmarkets.  Defensive sectors performed best, particularly utilities, with
energy equipment being notably weak.  Specific developments in Environmental
Markets during the month are discussed below.



There were further blackouts during September in both Denmark and Italy
following on from August's similar difficulties in the US and London - these
problems highlight the high technical grid requirements for today's modern
economy and the need to invest in network infrastructure and backup power
solutions.  The blackout continues in the US to have ramifications as the Energy
Bill (once again) attempts to reach closure; while many of the key issues remain
the same as last year, this time the political pressure to agree a final
document is much higher.  As it stands, the key elements of the Bill that will
affect the alternative energy companies are production tax credits for the wind
sector (3 year extension), tax credits for fuel cells and hydrogen and
legislation in favour of bioethanol.  Meanwhile, the policy landscape for
tackling global warming remains uncertain as the Russian President Vladimir
Putin continued to prevaricate about ratifying the Kyoto Protocol - the Russian
signature is essential if the agreement is to enter into force.



It was a high profile month for fuel cell (FC) and hydrogen companies as the
Grove Conference took place in London and the 2003 Challenge Bibendum (a race
for advanced technology vehicles) took place in California.  A number of
interesting developments in the FC and hydrogen sector were announced including
Ballard's (automotive fuel cells, Canada) partnership with Mitsubishi, the first
sale of a FuelCell Energy (stationary fuel cells, US) molten carbonate FC by
Caterpillar, new orders for Hydrogenics' (fuel cells and testing) FC testing
equipment and the sale by Quantum Fuel (hydrogen systems, US) of a 10,000 psi
hydrogen fuel system for vehicle refueling. Overall, these announcements
highlight the substantial technical progress in the application of fuel cells in
a wide range of markets; however substantial commercial and infrastructure
challenges remain before FCs are able to penetrate mass markets.



The water sector saw a number of important restructuring announcements during
September. Ionics (water treatment, US) announced a consolidation of a number of
its water treatment businesses that will lead to annual savings of over $15
million and substantial margin improvement through increased efficiency of the
manufacturing and purchasing functions.  Veolia Environnement (water & waste,
France) later announced a substantial writedown of its US Filter assets and the
decision to sell this part of the US business to focus on municipality
outsourcing.  This news also follows the sale of the water treatment company
Nalco by Suez to a group of private equity investors and highlights the ongoing
corporate activity in the US water treatment sector.  Water meter installation
continued to increase in the US as Honeywell, Itron (meters, US) and Badger
(water meters, US) announced a joint contract in Ohio for 78,000 residential
meters.


Important news in the waste and resource management sector included the award to
Tetra Tech (environmental consulting, US) of the $20 million clean-up project of
the Alcoa aluminium smelting plant in Portland, Oregon which came on top of two
large government contracts that the company also won during the month.  Another
consultant RPS Group (environmental consulting, UK) announced the acquisition of
Hydrosearch Associates Ltd, a significant provider of geological and other
environmental services to the energy sector.  One a less positive note, Seche
Environnement (hazardous waste, France) announced further difficulties with the
Tredi Environnement assets that it acquired in 2002 which led to the company to
make a loss for the first half of the year. Finally, Energy Developments
(landfill gas, Australia) clarified its strategy going forward as it raised A$40
million to invest in landfill gas projects in UK, US and Australian markets and
stated that it is seeking a ' strategic partner' for its gasifier technology
(SWERF) which has drained resources in recent years.



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



8 October 2003


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