Performance at month end

Impax Environmental Markets PLC
08 January 2004

IMPAX ENVIRONMENTAL MARKETS plc



All information is at 31 December 2003 and unaudited



DATA AND PERFORMANCE


Data                                      Pricing & Performance
Price (pence)                        55.5                         IEM            MSCI         Impax

                                                            Net Asset Value      World         ET50
Total Fund Size (m)                  33.1  Pence (31.12.03)       66.3            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      +1.1%           +2.0%        +2.2%
Number of stocks                       56      3 Months (%)      +5.2%           +5.7%        +4.9%
held
Exchange                           London        1 year (%)      +21.7%         +17.6%        +18.3%
Currency                              GBP  Year to date (%)      +21.7%         +17.6%        +18.3%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
RPS Group                            4.3      Environmental consulting     UK
Casella Waste                        3.9      Waste disposal & recycling   US
BWT                                  3.7      Water treatment              Austria
Vestas Wind Systems                  3.6      Wind                         Denmark
Wedeco                               3.6      UV disinfection              Germany
Ionics                               3.4      Water treatment              US
Tetra Tech                           3.4      Environmental consulting     US
Hydrogenics                          3.2      Fuel cells                   Canada
Shanks                               2.8      Waste management             UK
Trojan Tech                          2.7      UV disinfection              Canada

                 Total              34.6



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             53%        >£500m                  22%
Europe                    41%        £100-500m               57%
Rest of the World          6%        <£100m                  21%

Sectoral                             Profitability
Energy                    31%        Profitable              85%
Water                     37%        Pre-Profitable          15%
Waste                     31%
Cash                       1%
* of funds invested as of 31 December 2003





MANAGER'S COMMENTARY


The Company NAV increased by +1.0% during the month compared with the MSCI World Index and the Impax ET50 which
increased +2.0% and +2.2% respectively.   The global markets were led by energy and energy equipment companies
with IT being the weakest sector.  The fall (-3.7% during the month) of the US$ negatively affected the
Company's performance as IEM holds around 33% of total assets in this currency.  We do not propose to move from
our unhedged position. Specific developments in Environmental Markets during the month are discussed below.



The main news of the month was the announcement that the two large Danish wind turbine manufacturers Vestas and
NEG Micon are to merge in an all share deal to create a company with over 30% global market share - NEG Micon
shareholders will account for around 20% of the combined company that will retain the 'Vestas' name.  While
there will certainly be challenges integrating the two companies, the news is positive for turbine manufacturers
generally as the existence of fewer players should mean better margins for all market participants.  Meanwhile,
the newsflow from the sector has been positive with progress in offshore projects in Germany and a large order
for Vestas in Italy.  In the alternative fuel engines market, the Cummins Westport joint venture (CWI) was
extended albeit with a slightly different focus as CWI seeks to capitalise on the rapidly growing markets for
natural gas engines in China and India (a market currently being exploited by Impco Technologies); the deal
means that Westport's (natural gas engines, Canada) advanced IXG engine is not part of the JV for the time being
and that commercial sales of this engine are unlikely until 2005.  Also in transportation, Ballard (fuel cells,
Canada) announced that it had delivered three fuel cell buses to the London transport authorities and received
an order for a further three from the transport authority of Perth, Australia.

The water treatment and pollution control sector has seen a series of positive announcements during the month as
companies begin to benefit from the pickup in capital spending worldwide.  Cuno (filtration, US) and BW
Technologies (gas sensors, Canada) both reported record results and a strong outlook going into 2004.  The
turnaround process at Insituform (sewer repair, US) continued with the hiring of a new CFO from US Filter; this
completes the new management team that is focused on restoring the company's profitability and visibility of
earnings.  Veolia Environnement (water & waste, France) had a good month as it completed the sale of Everpure to
Pentair and won two projects in China - an €8.5 billion water contract in Shenzhen, China and €260 million waste
contract in Shanghai.  Finally Trojan Technologies (UV disinfection, Canada) expanded its product portfolio with
the acquisition of a majority interest in the hydrogen peroxide producer, US Peroxide - hydrogen peroxide is
used by the water industry for odour reduction and corrosion control.



It has been a quiet month for waste technologies and resource management companies with only two significant
announcements from portfolio companies.  RPS Group (environmental consulting, UK) made another small acquisition
in the planning and environment sector and also provided a positive trading update for the full year.  Casella
Waste (waste & recycling, US) reported results in line with expectations and provided a positive outlook on the
growth opportunities in the waste and recycling sector in NE United States.



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



8 January 2004






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