Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 30 September 2007 and unaudited.

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                   IEM   MSCI  Impax
                                                   Net   World  ET50
Share price                                       Asset
(pence)                 124.8                     Value
Warrants (pence)         44.0
Total fund size     GBP 273.2 Diluted NAV (pence) 122.2   n/a   n/a
(m)
Market              GBP 271.2    Premium/discount  +2.1
capitalisation                                (%)
(m)
Management fee            1.0       Undiluted NAV 125.6
(%)                                       (pence)
Established       22 February        Performance*
                         2002
Fund structure     Investment         1 month (%)  +1.3  +3.6  +10.0
                        Trust
Number of stocks           85        3 months (%)  -3.0  +0.4   +9.2
held
Exchange               London          1 year (%) +24.3  +9.1  +56.9
Currency                  GBP         3 years (%) +83.5  +38.5 +124.2
ISIN number      GB0031232498         5 years (%) +137.7 +70.8 +163.6
Sedol                 3123249        Since launch +27.9  +21.2 +50.3
                                 (22/02/2002) (%)
Reuters RIC code        IEM.L
                              * Performance data is for undiluted
Bloomberg code         IEM LN NAV.


TOP TEN HOLDINGS


Company             Holding %   Description               Country
Itron                     2.8   Meters & software         US
Chloride Group            2.5   UPS systems               UK
Vestas Wind Systems       2.4   Wind                      Denmark
Ormat                     2.4   Geothermal                Israel / US
                                High efficiency electric
Regal Beloit              2.3   motors                    US
Mayr Melnhof Karton       2.2   Recycled packaging        Austria
Vacon                     2.1   Power electronics         Finland
Gamesa                    2.1   Wind                      Spain
Stericycle                2.0   Clinical waste            US
Tomra                     2.0   Reverse vending machines  Norway

Total                    22.7


PORTFOLIO ANALYSIS*


Geographical            Company Size
North America      43%  >£1bn           27%
Europe             49%  £100-1bn        65%
Rest of the World   8%  <£100m          8%

Sectoral                Profitability
Energy             43%  Profitable      92%
Water              26%  Pre-Profitable  8%
Waste              31%
* of funds invested as of 30 September 2007













MANAGER'S COMMENTARY (September 2007)


The Company's NAV was up 1.3% over the month compared with the MSCI
World, which rose by 3.6%, and the Impax ET50, which rose by 10.0%
over the same period. In the broader markets Energy Equipment &
Services was the strongest performing sector, reflecting a rise in
the crude oil price to over US$80 per b.b.l. On the other hand small
cap stocks underperformed (the MSCI World Small Cap was up less than
a percent), which contributed to the Company's modest performance.

In the US, the Renewable Fuel Standard took effect at the beginning
of the month stipulating that a minimum volume of renewable fuel be
blended into gasoline. This volume will increase year on year to a
target of 7.5 billion gallons in 2012, and will require a minimum of
250 million gallons a year of cellulose derived ethanol beginning in
2013. Current ethanol capacity in the US already outstrips the
requirements and Energy Bill proposals in the Senate include an
emergency expansion of the Standard to maintain demand.

In the water sector, draft proposals for 2008 announced in the
Spanish parliament included almost ¤4.5 billion for water projects in
2008, an increase of 29%. Government desalination programmes and a
wastewater treatment plan will account for the majority of the
spending. In the UK regulations were amended governing compulsory
metering in areas of water stress. From 2010 utilities will be able
to impose metering where it is cost-effective.

In the waste sector, the Council of Seattle became the latest in a
number of US and global municipalities to adopt a 'zero waste'
strategy. Municipalities in California, Japan, Australia and Europe
have adopted similar strategies to improve their waste management.
Such programmes include diverting waste from landfill, improved
recycling facilities and producer responsibility legislation.

September was good for alternative energy and energy efficiency
stocks. Chloride Group (uninterruptible power supply, UK) increased
by 15% on the back of projected first-half sales ahead of consensus.
Performance was also strong for Active Power (flywheels, US), up 49%
following a successful fundraising, and Westport (clean diesel
engines, Canada), up 39% due to significant progress with contracts
in California. Both LKQ Corp (automotive recycling, US) and
Stericycle (clinical waste treatment, US) saw upgrades following
acquisitions. Other stocks in the portfolio suffered from the
slow-down in the construction and housing market on both sides of the
Atlantic. For example Nibe (ground source heat pumps, Sweden)
retreated after a profit warning that highlighted a weak German
market.


Latest information available at:


http://www.impax.co.uk/impax/funds/listed_funds/environmental_plc/

29 October 2007

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