Performance at month end

Impax Environmental Markets PLC
05 August 2004



IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 July 2004 and unaudited


DATA AND PERFORMANCE


Data                                      Pricing & Performance

Price (pence)                        59.5                         IEM            MSCI         Impax
                                                            Net Asset Value      World         ET50
Total Fund Size (m)                  32.9  Pence (31.07.04)       65.7            n/a          n/a
Management fee                       1.0%  Premium/discount      -9.4%
Established              22 February 2002
Fund structure           Investment Trust       Performance
Number of stocks                       62       1 month (%)      -4.9%           -3.6%        -6.5%
held
Exchange                           London      3 Months (%)      -3.3%           -3.3%        -4.7%
Currency                              GBP        1 year (%)      +9.6%           +2.3%        +2.2%
ISIN Number                  GB0031232498  Year to date (%)      -0.8%           -2.4%        -5.4%
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN


TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
Vestas Wind Systems                  3.9      Wind                         Denmark
RPS Group                            3.7      Environmental consulting     UK
Casella Waste                        3.4      Waste disposal & recycling   US
Ionics                               3.3      Water treatment              US
Itron                                3.2      Meters & software            US
Trojan Tech                          3.2      UV disinfection              Canada
Kurita Water                         3.0      Water treatment              Japan
Shanks                               2.8      Waste management             UK
Zenon Environmental                  2.8      Membranes                    Canada
Tetra Tech                           2.5      Environmental consulting     US

                 Total              31.8



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             51%        >£500m                  15%
Europe                    40%        £100-500m               58%
Rest of the World          9%        <£100m                  27%

Sectoral                             Profitability
Energy                    32%        Profitable              89%
Water                     36%        Pre-Profitable          11%
Waste                     31%
Cash                       1%
* of funds invested as of 31 July 2004





MANAGER'S COMMENTARY (July 2004)


The Company NAV decreased by -4.9% during the month compared with the MSCI World Index, which decreased -3.6%
and the Impax ET50 which decreased -6.5%.  As oil prices rose again, the best performing equity sectors were
energy and energy equipment with technology stocks being particularly weak.  In Environmental Markets ('IEM'),
the pre-profitable alternative energy companies all had a difficult month reflecting the higher short-term
correlation of these companies with technology stocks than with the oil price.  Specific developments in EM
during the month are discussed below.



The alternative energy sector underperformed again during the month as investors rotated out of technology
stocks particularly those that are not yet making profits.  However, the company specific news in these
companies was more positive as Active Power (flywheels, US) showed good results and a large order for a new
product, Hydrogenics (fuel cells, Canada) announced two new sales initiatives in the commercial and defence
sectors, and FuelCell Energy (fuel cells, US) announced a new distribution partner.  Also, Ballard (fuel cells,
Canada) announced a change to its partnership with DaimlerChrysler and Ford in the development of fuel cells for
the automotive sector. Ballard will focus on fuel cell stack development as the OEMs take responsibility for
systems integration, which means a lower cash burn for Ballard in the short term, but a smaller market in the
long term.  Elsewhere in alternative energy and energy efficiency we have seen Repower (wind turbines, Germany)
making progress outside its home country with orders in France and Italy; Aixtron (LED deposition technology,
Germany) acquired its US competitor Genus in an all-stock transaction; and Ricardo (clean engine automotive
consultancy, UK) reported that, after a difficult 18 months, it was starting to see an improvement in the
company's main markets.



Better than expected results and investments in new companies operating in interesting markets has been the
theme in water treatment and pollution control during the month.  The increase in capital and infrastructure
spending in the United States was reflected in the results of Badger Meter (water meters), Calgon Carbon (water
treatment), and Insituform (trenchless sewer repair) which all reported 2nd quarter numbers that were ahead of
expectations.  In other markets, we participated in a private placement for Pure Technologies (lead detection &
infrastructure monitoring, Canada) that has since announced strong results and upgraded its expectations for the
rest of the year, and we also participated in the successful IPO of Hamworthy (onboard water treatment & methane
capture, UK) on AIM.  Finally, Veolia Environnement (water & waste, France) completed its restructuring with the
sale of two environmental assets - Culligan (water filters and bottled water) to a US private equity firm and
its stake in FCC to Esther Koplowitz.



July 16 was a key date for the UK hazardous waste sector in general and end of life vehicles (ELVs) in
particular. With the onset of new legislation, the number of disposal sites for ELVs able to comply with the new
standards has fallen by 90%.  This may represent an opportunity for Shanks's (integrated waste management, UK)
chemical treatment business and also Universal Salvage (vehicle auctions & recycling, UK) which does own sites
with the required authorisations for ELVs, but is currently suffering weakness in its existing markets, and
announced heavy losses during the month.  On the other side of the Atlantic, LKQ (vehicle recycling, US)
continues to demonstrate its successful business model in the automotive recycling market and announced solid
2nd quarter numbers.  Otherwise, the newsflow in waste technologies & resource management has been positive with
RPS Group's results being ahead of expectations; Lassila & Tikanoja (waste treatment & outsourcing, Finland)
expanding into soil remediation and announcing strong results; and Energy Developments (landfill gas, Australia)
announcing a PPA for a new distributed generation project with Western Power Corporation.  Only Tomra's
(recycling, Norway) results disappointed with slightly lower profitability than expected.


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


5 August 2004





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