Performance at month end

RNS Number : 3382O

Impax Environmental Markets PLC

15 September 2011

 



IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 August 2011 (unless otherwise stated) and unaudited.

DATA AND PERFORMANCE

Pricing
NAV (pence)	122.18
Share price (pence)	102.30
Premium/(discount) (%)	(16.27)
Data
Total fund size (NAV) ( m)		GBP 378.5
Market capitalisation (m)		GBP 316.9
Management fee (%)		1.0
Established		22nd February 2002
Fund structure		Investment Trust
Number of holdings (including unlisted)		81
Exchange		London
Currency		GBP
ISIN Number		GB0031232498
Sedol		3123249
Reuters RIC code		IMPX.L
Bloomberg code		IEM LN

Performance	IEM Net Asset Value*	MSCI World Global Small Cap**	FTSE ET50**
1 month %	-6.2	-7.5	-6.8
3 months %	-10.5	-11.4	-15.2
YTD %	-13.8	-9.0	-18.1
1 year %	+3.8	+13.9	-6.4
3 year %	-4.4	+25.4	-38.8
5 year %	+24.1	+29.8	+10.2
7 year %	+88.6	+81.0	+63.5

* Performance data incorporates undiluted NAV until exercise of warrants on 25 June 2010

** Total return

TOP TEN HOLDINGS

Company	Holding %		Description	Country
Telvent	3.3		Automated meter reading	Spain
Regal-Beloit	3.2		Electric motors	US
LKQ	3.2		Automotive recycling	US
Horiba	3.1		Environmental & engine testing	Japan
Pall Corp	3.0		Filtration	US
Nibe	3.0		Ground source heat pumps	Sweden
Clean Harbors	2.3		Hazardous waste treatment	US
EDP Renovaveis	2.2		Renewable IPP	Spain
Vacon	2.2		Power electronics	Finland
Kingspan	2.2		Insulation products	Ireland
TOTAL	27.7

PORTFOLIO ANALYSIS

Geographical US and Canada 37% Europe 41% Japan 6% Asia ex Japan 12% Australia 3% Cash 1%		Company Size >$2bn 35% $500m-2bn 47% <$500m 13% Private 4% Cash 1%
Sectoral Energy efficiency 28% Renewable energy 19% Environmental support services 5% Waste management 25% Pollution control 6% Water infrastructure 16% Cash 1%		PE Ratios >20x 14% 15-20x 25% <15% 55% Unprofitable and private 5% Cash 1% Average 13.6x

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (August 2011)

Market Review
Following a difficult July, equity markets saw their slide steepen sharply in August before stabilising towards the end of the period. The main reasons lying behind this performance were continued doubts about the state of European public finances and the fears of a recession in the United States, both of which may give rise to a slowdown in global growth. This has been reflected in our more defensive approach to portfolio management, with an increased exposure to business models with better earnings visibility and companies with long term contract businesses. We have continued to reduce our holdings in companies with high earnings sensitivity to economic growth, those with exposure to uncertainties in global construction markets, and those with high levels of indebtedness.

Performance Summary
Companies in defensive sectors with non-cyclical characteristics, such as Stericycle (medical waste treatment, US) provided a positive contribution to performance. Additional gains came from US companies Pall Corp (filtration), Clarcor (air pollution control) and LKQ (automotive recycling), all of which displayed resilient earnings.

Delays to the anticipated recovery of the construction sector and concerns over reductions to government budgets weighed on performance of Watts Water (water control products, US) and RPS (environmental consulting, UK) respectively. Further weakness resulted from profit taking in Greenko (renewable IPP, India) following previous strong performance.

Policy Update

China continued its support for renewables by announcing a national feed in tariff of 20 cents/kWh for solar projects. Japan also approved a bill to subsidize electricity from renewable sources, allowing for incentives that guarantee above-market rates for wind, solar and geothermal energy. Effective on 1 July 2012, the bill continues Japan's shift away from nuclear power following the Fukushima disaster. Following the recent bill to exit nuclear by 2022, the German government agreed to increase investment in clean-energy technology research by about 75%, offering funding of US$ 4.9bn over the next three years.

China plans to eliminate incandescent bulbs for general lighting by 2016 in order to push forward the implementation of energy efficient lighting. China also announced spending targets for waste water and municipal solid waste treatment during the 12th Five Year Plan with the expectation of US$ 70m of investment from the central government, local government and private sector.

In the US, policy was dominated by debt discussions resulting in the agreement to raise the country's debt limit and issue spending cuts. Despite this, ethanol subsidies will remain and the Obama administration increased fuel efficiency standards to 54.5 MPG for vehicles sold in the US by 2025, due to take effect from 2017.

Impax Asset Management is supportive of the UK Stewardship Code. Our full Stewardship Code statement, ESG and Proxy Voting policies and the quarterly summaries of our proxy voting activities can be viewed on:

http://www.impax.co.uk/en/investor-relations/governance-csr 

15 September 2011

 

END

 

 

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