Performance at month end

Impax Environmental Markets PLC
11 June 2004


IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 May 2004 and unaudited


DATA AND PERFORMANCE

                                          Pricing & Performance
Data                                                              IEM            MSCI         Impax
Price (pence)                        60.0                   Net Asset Value      World         ET50   
Total Fund Size (m)                  33.1   Pence (31.5.04)       66.1            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      -2.8%           -2.6%        -3.1%
Number of stocks                       59      3 Months (%)      -2.8%           -1.2%        -6.0%
held
Exchange                           London        1 year (%)      +20.2%          +8.6%        +9.2%
Currency                              GBP  Year to date (%)      -0.3%           -1.8%        -3.8%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN


TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
Itron                                3.9      Meters & software            US
Casella Waste                        3.9      Waste disposal & recycling   US
Vestas Wind Systems                  3.8      Wind                         Denmark
RPS Group                            3.6      Environmental consulting     UK
Trojan Tech                          3.5      UV disinfection              Canada
BWT                                  3.3      Water treatment              Austria
Ionics                               3.2      Water treatment              US
Kurita Water                         3.1      Water treatment              Japan
Shanks                               2.9      Waste management             UK
Tetra Tech                           2.7      Environmental Consulting     US

                 Total              33.9


PORTFOLIO ANALYSIS*

Geographical                         Company Size
North America             53%        >£500m                  21%
Europe                    38%        £100-500m               54%
Rest of the World          9%        <£100m                  24%

Sectoral                             Profitability
Energy                    33%        Profitable              87%
Water                     35%        Pre-Profitable          13%
Waste                     31%
Cash                       1%

* of funds invested as of 31 May 2004


MANAGER'S COMMENTARY (May 2004)

The Company NAV decreased by -2.8% during the month compared with the MSCI World
Index which decreased -2.6% and the Impax ET50 which decreased -3.1%.   Specific
developments in Environmental Markets during the month are discussed below.

The rising oil price was once again in focus during the month with Brent Crude
touching $39 per bbl. for the first time since 1990.  The Renewables 2004
conference in Bonn was particularly timely and a number of German renewable
energy companies saw their share prices move up sharply.  It was a good month
for Vestas (wind turbines, Denmark) as the company completed its rights issue
for 2 billion DKK (€270 million) following the merger with NEG Micon and the US
Senate passed the JOBS Act which includes a 3 year extension of the PTC - we
remain optimistic that the legislation will be approved by Congress during the
third quarter.  Fuel cell stocks were volatile as the long-term outlook and
policy backdrop remained positive but several North American companies (FuelCell
Energy, Ballard, and Hydrogenics) reported financial results that were below
expectations. Finally, there were strong indications that the power electronics
markets are picking up as Vacon (frequency converters, Finland) announced a
series of partnerships in Scandinavia and both Chloride (uninterruptible power
supplies, UK) and Xantrex (power electronics, Canada) announced good results.

Corporate activity again dominated the water treatment and pollution control
sector during the month.  First Technologies (safety & sensors, UK) acquired the
IEM holding BW Technologies (gas sensors, Canada) to become a fully-integrated
sensor provider and increase exposure to this rapidly growing market.  General
Electric made its 5th environmental technology acquisition in the last 2 years
with the purchase of BHA Group (pollution control, US); this highlights the
company's interest in renewable energy and air/water treatment as markets with
tremendous growth potential.  Also in North America, Cuno (filtration, US) has
acquired WTC Industries (filtration, US) to further consolidate the filtration
market and increase its presence in the point-of-use sub-sector while Siemens
has also entered the water treatment market with the purchase of US Filter from
Veolia Environnement (water & waste, France).   The financial results from
companies were also positive, particularly in Japan where both Kurita (water
treatment) and Horiba (testing & monitoring) reported strong results with a
buoyant outlook for 2005.  Finally, Zenon Environmental  (membranes, Canada)
continued to outperform with a quarterly earnings growth of 69% following the
successful expansion in Hungary;  the company also raised a further C$100m to
finance 'growth opportunities'.

There was further consolidation in the UK landfill market as Shanks (waste &
recycling, UK) sold its landfill assets to Terra Firma (private equity fund that
bought Waste Recycling in 2003) for £227 million which is more than 10% higher
than the price thought to have been offered by the water utility Pennon Group.  
The transaction leaves Shanks with a much stronger balance sheet and a strong
technology platform to take advantage of the growth potential in UK waste
recycling markets.  Also in the UK, RPS Group (environmental consultancy, UK)
announced a series of acquisitions (including expansion of its new Energy
business) and reported that the growth expectations for the year remain on
track.

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


11 June 2004


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