Performance at month end

Impax Environmental Markets PLC
06 October 2004

IMPAX ENVIRONMENTAL MARKETS plc



All information is at 30 September 2004 and unaudited



DATA AND PERFORMANCE


Data                                      Pricing & Performance
Share Price (pence)                  61.5                         IEM            MSCI         Impax

                                                            Net Asset Value      World         ET50
Total Fund Size (m)                  34.3  Pence (30.09.04)       68.5            n/a          n/a
Management fee                       1.0%  Premium/discount      -10.2%
Established              22 February 2002
Fund structure           Investment Trust       Performance
Number of stocks                       60       1 month (%)      +4.3%           +1.2%        +3.3%
held
Exchange                           London      3 Months (%)      -0.8%           -1.2%        -3.6%
Currency                              GBP        1 year (%)      +8.7%           +5.8%        +2.4%
ISIN Number                  GB0031232498  Year to date (%)      +3.3%           +0.0%        -2.4%
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN




TOP TEN HOLDINGS


Company                        Holding %      Description                  Country
Trojan Tech                          4.7      UV disinfection              Canada
RPS Group                            3.9      Environmental consulting     UK
Vestas Wind Systems                  3.8      Wind                         Denmark
Casella Waste                        3.3      Waste disposal & recycling   US
Ionics                               3.2      Water treatment              US
Itron                                3.1      Meters & software            US
Kurita Water                         2.8      Water treatment              Japan
Zenon Environmental                  2.7      Membranes                    Canada
Shanks                               2.6      Waste management             UK
BWT                                  2.5      Water treatment              Austria

                 Total              32.6



PORTFOLIO ANALYSIS*


Geographical                         Company Size
North America             53%        >£500m                  19%
Europe                    39%        £100-500m               59%
Rest of the World          9%        <£100m                  22%

Sectoral                             Profitability
Energy                    32%        Profitable              88%
Water                     37%        Pre-Profitable          12%
Waste                     31%
Cash                       0%
* of funds invested as of 30 September 2004


MANAGER'S COMMENTARY (September 2004)


The Company NAV was up +4.3% during the month compared with the MSCI World Index, which increased +1.2% and the
Impax ET50, which increased +3.3%.  After a couple of weak months, equity markets were stronger despite a
continued increase in the price of oil which finished the month at another all-time high of Brent Crude at $46.6
per bbl.  Technology and energy equipment shares performed best while the defensive sectors including utilities
were the weakest. Specific developments in EM during the month are discussed below.



September has been a very good month for the alternative energy and energy efficiency sub-sector.  The decision
by the Russian cabinet to forward the 1997 Kyoto Protocol on climate change to the Russian parliament (Duma)
will - if the Duma ratifies - bring the Protocol into force and thus provide a new lease of life for
international cooperation on climate change.  Challenges remain to bring the remaining countries (particularly
the US) into the fold but the development is important in creating a framework for the global reduction of
carbon dioxide emissions.  Meanwhile, in the US, a one year extension to the long-awaited production tax credit
('PTC') for wind power was approved and this means a subsidy of 1.8 c/kWh for the first 10 years of the
project's life.  This news should release the strong pent-up demand for wind in North America which is very
positive for Vestas (wind turbines, Denmark) though they will certainly face stiff competition from GE Wind.  In
the fuel cell sector, Ballard (fuel cells, Canada) demonstrated its fuel cell technology for three distinct
backup power applications, and (with Ford) unveiled the first production vehicles as part of the US Department
of Energy demonstration program.  Also Hydrogenics (fuel cells, Canada) announced several orders for both its
fuel cell testing equipment and fuel cell power modules.  These developments indicate that this emerging
industry continues to make good progress towards commercialisation in key portable, stationary and automotive
markets.  Finally, there have been positive announcements from companies in other key energy markets including
Ricardo (automotive consultancy, UK); Senea (automated meter reading, Sweden), Chloride (uninterruptible power
supplies, UK), and Xantrex (power electronics, Canada).



The acquisition of Trojan Technologies (UV disinfection, Canada) by Danaher Corporation at a 40% premium to the
20-day average price was the main news from the water treatment and pollution control sub-sector.  This takeover
is another example of how large industrial companies are prepared to pay good prices for emerging technology
companies in the Environmental Markets sectors particularly when the technology is proven commercially and the
risk substantially reduced.  Calgon Carbon (activated carbon & UV disinfection, US) remains the last independent
supplier of UV disinfection equipment that also holds an important patent for the drinking water market.  In a
different market, Bioteq Environmental (mining leachate cleanup, Canada) announced first the commercial
operation of two existing plants involving the recovery of copper and then a new project with Placer Dome for
the treatment of wastewater at a zinc/copper mine.



New waste legislation in the UK & Ireland continues to create market opportunities in the waste technologies and
resource management sub-sector.  Two small UK companies in this area both announced good results during the
month.  PM Group (weighing devices, UK) is benefiting from the move of the waste industry towards a 'pay by
weight' system which has recently been made mandatory in Ireland.  Also, Straight plc (recycling bins, UK)
reported that the local authority market for recycling containers and composting bins remains buoyant as EU
Directives are implemented.   Other news in the sector included a strong quarter from Casella Waste (waste and
recycling, US) with improved margins, another acquisition by Stantec (environmental consultancy, Canada) and a
warning from Tetra Tech (environmental consultancy, US) on weakness in infrastructure markets in North America.





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



06 October 2004


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