Half-year Financial Report

Impax Environmental Markets PLC

30 September 2026

 

LEI: 213800RAR6ZDJLZDND86

IMPAX ENVIRONMENTAL MARKETS PLC HALF-YEARLY REPORT ANNOUNCEMENT FOR THE SIX MONTHS TO 30 JUNE 2026

Impax Environmental Markets plc (LSE: IEM) (the "Company" or "IEM") today announced its half-yearly results for the six months to 30 June 2026.

Investment Objective

The investment objective of Impax Environmental Markets plc is to enable investors to benefit from growth in the markets for cleaner or more efficient delivery of basic services of energy, water and waste.

Investments are made predominantly in quoted companies which provide, utilise, implement or advise upon technology-based systems, products or services in environmental markets, particularly those of alternative energy and energy efficiency, water treatment and pollution control, and waste technology and resource management (which includes sustainable food, agriculture and forestry).

Financial Highlights

At 30 June 2026 and 31 December 2025

	30 June 2026	31 December 2025
Net asset value ("NAV") per ordinary share	534.0p	427.1p
Net assets	£208m	£813m
Ordinary share price discount to NAV1	13.5%	7.2%
Ordinary share price	462.0p	396.5p

Performance Summary

For the six months ended 30 June 2026 and 30 June 2025, % change

	2026	2025
NAV total return per ordinary share1,2	26.1%	-3.0%
MSCI AC World Index2	12.7%	0.6%
Share price total return per ordinary share1	17.4%	-2.3%

1 These are alternative performance measures ("APMs").

2 Source: Bloomberg and FactSet.

Alternative performance measures ("APMs")

The disclosures as indicated in footnote 1 are considered to represent the Company's APMs. Definitions of these APMs and other performance measures used by the Company, together with how these measures have been calculated, can be found in the Half-year Report.

Chair's Statement

Dear Shareholder,

The period to 30 June 2026 under review has been one of significant change for the Company. As this is my first statement as Chair I wanted to set out the key changes during, and since 30 June 2026, and the Board's key priorities moving forward.

Board Changes

A new Board, comprising myself, Jason Chen, Steven Grey and Aaron Morris, was appointed at the Company's General Meeting in June. My fellow directors appointed me to be Chair. Since our appointment, our focus has been on reviewing the Company's financial position and its investment portfolio, and understanding in detail its governance and operating arrangements. We are committed to ensuring it remains appropriately governed given the developments during the period and to acting in the best interests of shareholders. We look forward to maintaining an open and constructive dialogue with investors as we help shape the Company's future.

Following our initial governance review, we have maintained the Company's previous committee structure and each of the Committees comprise all members of the Board. The Audit Committee is chaired by Steven Grey. The Management and Engagement Committee is chaired by Aaron Morris, who also assumed the role of Senior Independent Director. The Nominations Committee, Remuneration Committee and the Sustainability Reporting Committee are chaired by Jason Chen. The Board, having taken legal advice from the Company's solicitors on the considerations relevant to making the decisions, considers each of the Directors to be independent within the meaning of the AIC Corporate Governance Code and also independent of Saba Capital, the Company's largest shareholder.

The Board remains committed to ensuring the ultimate success of the Company and its alignment with the interests of its shareholders.  

RFP Process

On 20 July 2026, the Board announced that following a review of the Company's investment management arrangements, it had served notice on Impax Asset Management (AIFM) Limited (the "Investment Manager") to terminate the existing investment management agreement. The investment management agreement has a notice period which will expire on 31 July 2027.

As announced at the time, the Management and Engagement Committee commenced a process to identify and appoint an alternative investment manager or identify a strategic alternative which best suits shareholder interests going forward. Hudnall Capital LLP has been appointed as the Company's financial adviser in relation to that process, and the Board looks forward to providing shareholders with further updates on the process in due course.

Engaging with Shareholders

As part of the strategic review process the Board will continue to engage with all key stakeholders to take into account their viewpoints on the future of the Company.

Performance

For the six months ended 30 June 2026, on a total return basis the Company's net asset value ("NAV") increased 26.1%, whilst the MSCI ACWI increased 12.7%. The corresponding share price total return increased 17.4% but the discount widened, moving from 7.2% at the start of the Period to 13.5% at the end. The Investment Manager's Report within the Half-year Report provides a detailed overview of performance during the Period.

Other Strategic Changes

A number of other strategic changes took place in the Period under review. Although these preceded our appointment as a Board and as such we were not responsible for these decisions, they nevertheless were significant events for the Company and shareholders during the Period, including:

Additional Benchmark

As noted in the most recent Annual Report, the Company adopted the Solactive Global Environmental Markets Specialists Index ("GEMS") benchmark in the fourth quarter of 2025 to complement the assessment of the Company's performance against its environmental markets opportunity set. Given the timing of its introduction, the benchmark data remains at an early stage and does not yet provide a sufficiently long period for meaningful comparison and analysis. Accordingly, the Board has not included formal reporting against the GEMS in this year's Half-year Report and expects to do so for the first time in the next Annual Report, when a more complete dataset will be available to provide shareholders with a more informative assessment of performance. However, year-to-date GEMS data is included in the Investment Manager's report to provide shareholders with an indication of progress against this benchmark during the period.

Tender Offer

A key development during the period was the completion of the Exit Tender Offer on 19 May 2026, which provided shareholders with an opportunity to realise some or all of their investment. In total, 148,202,139 shares were repurchased and cancelled by the Company pursuant to the Tender Offer, resulting in a significant return of capital to participating shareholders and a corresponding reduction in the size of the Company.

Repayment of Debt

Following the completion of the Tender Offer, the Company repaid in full all amounts outstanding under its privately placed notes (the "Loan Notes") issued to funds managed by Pricoa Private Capital and repaid its revolving credit facility ("RCF") with Bank of America, resulting in the redemption of the Loan Notes and cancellation of the RCF. As a consequence, the Company had no borrowings outstanding at or since the Period end.

The repayment of all borrowings also simplifies the Company's reporting. As the Company no longer has debt instruments requiring a fair value adjustment, it is no longer necessary to present both debt-at-par and debt-at-fair-value NAVs. Accordingly, the Company now reports a single NAV measure.

Dividend

The Company's net revenue return for the Period was £2.2 million, compared with £7.6 million earned in the same period last year. Earnings per share in the Period have fallen to 1.29 pence (compared to 3.44 pence for the six months to 30 June 2025), this reduction in headline revenue reflects the Company's buying back of shares during the tender offer process.

The second interim dividend for the 2025 financial year, of 3.2 pence per ordinary share, was declared on 3 February 2026 and paid on 6 March 2026. The aggregate dividend for 2025 was 5.1 pence, an increase of 2.0% from 5.0 pence for the previous year. The Board intends to continue to pay dividends in accordance with the requirements of maintaining the Company's investment trust status.

On 30 September 2026, the Board announced a first interim dividend for this financial year of 2.0 pence per ordinary share (2025: 1.9 pence), payable on 30 October 2026 to shareholders who appear on the register at 9 October 2026, with an ex-dividend date of 8 October 2026.

Discount

The discount at which the shares trade to the underlying NAV is actively monitored by the Board. The Company's ordinary shares traded at a discount to NAV of 13.5% on 30 June 2026 which has widened since 31 December 2025 when the discount was 7.2%.

Excluding the Exit Tender Offer, the Company has bought back 3,349,232 shares in the Period, equivalent to 1.8% of the Company's issued share capital at the start of the year. At the Annual General Meeting held in June, shareholders did not approve the renewal of the Company's share buyback authority. As a result, the Company has not repurchased any shares since that date and will not undertake any share buy backs unless and until a new authority is granted by shareholders. The Board will continue to keep the Company's arrangements under review and engage with shareholders on these matters as appropriate.

There were 190.4 million ordinary shares in circulation at the start of the year. After buy backs and the Exit Tender Offer, this was reduced to 38.9 million, with 118.6 million shares held in treasury at 30 June 2026.

To our shareholders, I extend my sincere thanks for your continued support and commitment to the Company.

Caroline Bault, Chair

29 September 2026

Manager's Report

In the first half of 2026, IEM's NAV delivered a net total return of 26.1%. Global equities as measured by the MSCI All Country World Index (ACWI) returned 12.7% over the same period. The Solactive Global Environmental Markets Specialists (GEMS) Index, which exists to reflect IEM's opportunity set, returned 25.0%.

The first half of 2026 was marked by volatility. Geopolitics provided one of the main drivers in Q1, with the US seizing Venezuela's President Maduro, ratcheting up tensions with Europe over Greenland, and initiating full-blown conflict with Iran. Separately, the AI trade took on two very different shapes. At one end, investors focused on surging memory demand and supply bottlenecks for chips, equipment and electricity. At the other, valuations were hit by fears of business disruption and diminishing returns on investment. All of this was set against an uncertain inflation backdrop, with the US Consumer Price Index touching 4.2%¹, eliminating previous expectations of a cut to interest rates and instead raising the prospect of a hike.

Market performance diverged sharply at a sector level as a result. IT stocks delivered the strongest returns, fuelled by the rally in semiconductor and equipment stocks, even as the "Magnificent Seven"² and Communication Services stocks were some of the weakest. Energy stocks also performed well, despite oil pulling back steadily from its peak of more than $110/barrel. Some of the weakest parts of the market were Consumer Discretionary and Consumer Staples, facing inflationary pressure and value-seeking consumers. Regionally, Asia was the strongest performer, reflecting the high weight of chipmakers in key markets.

Against this backdrop, the portfolio has delivered strong returns from an array of themes. Companies benefitting from the build out of data centres such as Marvell Technology, which supplies specialist chips and interconnectors, as well as those enabling digitalisation more broadly (like KLA, a provider of solutions for semiconductor yield management) have been some of the strongest performers. In addition to Digital Infrastructure, many of these stocks sit within the Energy Management & Efficiency sector of our Environmental Markets taxonomy, given the role they play in boosting the level of computational power achieved for a given unit of energy.

Companies enabling electrification have also performed strongly. IEM's exposure here spans turbine producers like Siemens Energy, the electrical cable manufacturer Prysmian and CATL, the Chinese-listed leading producer of batteries. While some of these stocks have benefited from surging demand related to data centre build out, the conflict in Iran has also placed a renewed emphasis on energy security, efficiency and affordability.

More recently, the portfolio has benefited from its exposure to the construction sector, which has seen fears of higher interest rates eased by signs of a more measured rise in inflation. At the same time, constructive employment and economic data had a positive read across for housing. As a result, stocks like Watts Water (fluid control), Advanced Drainage Systems (stormwater and sanitation) and Trex (sustainable decking) all benefited from improving sentiment. Advanced Drainage also provided robust forward guidance at its investor day which reassured shareholders about the long-term investment case.

Weakness in the portfolio has primarily been driven by the portfolio's software holdings. Advances in AI, particularly around coding and design, have led some investors to question the terminal value of software businesses such as PTC, Trimble and Bentley Systems, even as current earnings data remains robust. The effect has been even more pronounced as a result of investors shifting their IT exposure from software into hardware names most visibly benefitting from currently supply and demand imbalances.

Key Developments and Drivers of Environmental Markets

AI and the Grid

After two decades of near-flat consumption across most advanced economies, electricity demand is growing again. The International Energy Agency now expects global electricity demand to rise by around 3.6% a year to 2030, roughly 50% faster than the pace of the previous decade³. This is being driven by the electrification of industry, transportation, heating and cooling, as well as the growth of data centres.

Increasingly however, the binding constraint on electricity supply is not generation, but the cables and wires required to distribute it. The start of 2026 was marked by investors rotating out of mega-cap technology names into so-called "heavy-asset, low obsolescence" or HALO stocks. This reflected the growing understanding that bottlenecks for project completion were increasingly about traditional infrastructure. Around 80% of global wind and solar generation is now cheaper than coal or gas, yet a growing pipeline of projects sit waiting to be connected to the electricity grid for want of transmission capacity⁴. The IEA estimates that annual grid investment must rise by roughly half from today's ~$400bn to meet demand through 2030, while other forecasts put cumulative global grid spending at close to $5.8trn over 2026-2035⁵. Europe faces a particular squeeze, with cross-border transmission capacity needing to double by the end of the decade⁶.

For IEM this is among the richest opportunity sets in the portfolio, and one that spans several parts of the Environmental Markets universe. Within Energy Management & Efficiency, the Smart & Efficient Grids theme captures the leading suppliers of electrical equipment such as Schneider Electric and Siemens Energy, whose transformers, switchgear and grid-automation products are in acute demand. The transmission build-out favours cable manufacturers such as Prysmian, while grid-connected networks and utilities, including SSE, stand to benefit from rising rate-base investment.

Carbon Pricing at the Border

On 1 January 2026 the EU's Carbon Border Adjustment Mechanism (CBAM) came into effect⁷. CBAM places a carbon cost on imports across six carbon-intensive categories: iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. These are priced to mirror the cost that EU producers pay for their carbon emissions under the Emissions Trading System (ETS). Its purpose is to prevent "carbon leakage": the migration of emissions-heavy production to jurisdictions with laxer climate rules.

Two features shape the near-term impact. First, timing. Although emissions embedded in 2026 imports are now in scope, the purchase and surrender of CBAM certificates has been deferred, with the first declaration due in September 2027. As a result, cash flows will be deferred until next year. Second, the 2025 "Omnibus" simplification introduced a 50-tonne 'de minimis' threshold that exempts roughly 90% of importers while still capturing around 99% of embedded emissions. This concentrates the burden on the largest and most carbon-intensive trade flows. In parallel, the free ETS allowances historically granted to CBAM sectors are being withdrawn at 2.5% a year, progressively sharpening the incentive to decarbonise.

The read-across for Environmental Markets is constructive. By raising the cost of high-carbon imported materials, CBAM improves the relative economics of lower-carbon and circular alternatives. This is particularly the case for scrap-based metals producers and the recyclers whose output carries a fraction of the embedded carbon of primary production. It also reinforces the investment case for green hydrogen infrastructure within Alternative Energy, and for the environmental testing, monitoring and verification businesses that will be called upon to measure and certify embedded emissions. Longer-term, a proposed 2026 extension of CBAM to downstream goods could widen the affected universe considerably.

Energy Security and Electric Vehicles

On 28 February 2026, the US began a campaign of airstrikes on Iran. In response, the Iranian regime began a blockade of the Strait of Hormuz, through which roughly a fifth of the world's oil passes, As a result, Brent crude rose around 65% by the end of March, its largest monthly gain on record, peaking near $115 a barrel before a temporary ceasefire brought some relief⁸. Volatility has persisted since.

Against this backdrop, European electric-vehicle demand has accelerated. Registrations of battery-electric vehicles rose 33.7% year-on-year to around 1.24 million in the first half of 2026, reaching a 25.6% market share in June⁹. As well as the higher cost of petrol and insecurity of supply, customers are also focused on tighter emissions rules. Electrification is a structural hedge against the geopolitics of imported crude, reframing the transition from a climate ambition into a strategic imperative.

IEM's investment across this theme are expressed principally through components rather than carmakers. The battery value chain is central: Chinese-listed CATL retains around 40% of the global market and continues to supply the low-cost batteries on which affordable European models depend. Beyond the batteries, the opportunity extends across the semiconductor and power-electronics content that electrified transport increasingly requires. Littelfuse supplies the circuit protection, high-voltage fuses and sensing components whose content per vehicle rises sharply with electrification. Similarly, Monolithic Power Systems provides the power-management semiconductors that govern power transmission systems and on-board-charger efficiency. Alongside these sit the charging infrastructure and power-conversion equipment captured through holdings such as Delta Electronics, and the grid reinforcement needed to serve rising EV load.

1 Consumer prices up 4.2% over the year ended May 2026 : The Economics Daily : U.S. Bureau of Labor Statistics.

2 Microsoft, Amazon, Meta, Alphabet, Nvidia, Apple, Tesla.

3 https://www.iea.org/reports/electricity-2026/grids.

4 https://www.iea.org/reports/energy-technology-perspectives-2026/executive-summary.

5 https://www.iea.org/reports/electricity-2026/grids.

6 https://energy-infrastructure-partners.com/five-trends-shaping-energy-infrastructure-in-2026/.

7 https://icapcarbonaction.com/en/news/eu-cbam-enters-compliance-phase-and-outlines-path-ahead.

8 Bloomberg, as of June 30, 2026.

9 https://insideevs.com/news/802351/europe-ev-sales-half-year/.

Absolute Performance Contributors and Detractors

Contributors

KLA (Water Efficiency, US) made the biggest positive contribution to returns. Shares in the maker of semiconductor process control solutions rallied following robust earnings growth and an upgrade to the full year outlook. Ongoing supply constraints in memory chips are underwriting continued momentum in KLA's earnings growth. At the same time, the company's technological leadership in inspection technologies is giving investors renewed confidence in its competitive positioning.

Marvell Technology (Efficient IT, US) also boosted performance. The producer of specialised chips and interconnectors delivered very strong results, citing "exceptional" growth in its data centre business. The company also benefited from news that it was teaming up with Google to build new AI chips, as well as comments from Nvidia CEO Jensen Huang that the company could reach a US$1tn market value. Given its recent run of performance, we have taken some profits.

Delta Electronics (Cloud Computing, Taiwan) further lifted returns. Shares in the maker of computational power supplies continued their strong run against a backdrop of continued AI-related capex and supply bottlenecks. Delta reported quarterly results with operating profit well ahead of expectations, citing the shift to high-voltage data centres (HVDC) and liquid cooling as key growth drivers. The company's chairman also announced that capex would rise by 10% in 2026. With the shares approaching our estimate of fair value, we have reduced the holding.

Detractors

Trimble (Efficient IT, US) delivered the weakest contribution to portfolio returns. Shares in the logistical software and hardware company pulled back despite revenue and earnings which beat analysts' expectations. Investors focused on an implied outlook for the second half of the year which was disappointing, with management citing macroeconomic uncertainty as a reason for caution. The stock has also been weathering a broader market view that software is at risk from AI disruption, with platforms like Claude integrating computer-assisted design into their offerings. However, in our view, the likelihood of these displacing complex and integrated construction tools has been overstated.

PTC (Efficient IT, US) also detracted from performance. The producer of design and product lifecycle management software reported earnings which beat analyst consensus but, with the divestiture of Kepware and ThingWorx - units focused on industrial connectivity - cut its full-year revenue outlook. Furthermore, relatively modest growth (8.5%) in annualised recurring revenues appeared to confirm some investors' suspicions that AI is disrupting software companies. However, PTC is now a business fully focused on the 'product lifecycle', and trades at a discount to peers despite strong cashflows and a newly announced US$2bn share buyback programme.

Sanhua Intelligent Controls (Buildings Energy Efficiency, China) is a manufacturer of advanced HVAC (heating, ventilation and air conditioning) and refrigeration components. Despite reporting robust full year results in March, the company reported disappointing revenue growth and offered limited near-term visibility at its subsequent quarterly results. In particular, Sanhua is seeing weaker HVAC volumes as Chinese home appliance subsidies are cut, at the same time as a strengthening Chinese yuan is weakening export-driven revenue. The portfolio managers have since exited the position, choosing to reallocate the capital elsewhere.

Relative Performance Analysis

	6 Months ended
	30 June 2026
Performance relative to MSCI ACWI	%
NAV total return	26.1
MSCI ACWI total return	12.7
Relative performance	13.4
Analysis of relative performance:
Portfolio total return	26.5
MSCI ACWI total return	12.7
Portfolio outperformance	13.8
Borrowing:
Gearing effect	0.9
Finance costs	(0.2)
Management fee	(0.4)
Other expenses	(0.3)
Trading Costs	(0.5)
Share transactions:
Buybacks	0.2
Other	(0.1)
Total relative NAV performance	13.4

Positioning and Trades

As of 30 June 2026, the Company holds a diversified portfolio of 53 listed businesses. Turnover for the six months up to this point was 52.8%. This turnover figure considers activity taking place outside of the tender offer process, which saw a slice of the portfolio sold to raise the proceeds required under the offer. The 52.8% figure reflects the final stage of portfolio consolidation which we concluded earlier in the year, having progressively consolidated the portfolio throughout 2025. While we have made use of market volatility to initiate, exit, and adjust holdings (and will continue to do so), we would expect, all other things being equal, turnover to normalise steadily towards our historic 20-40% range.

Year-to-date, our purchases have focused on two things: selectively increasing our exposure to companies with highly visible paths to higher earnings (such as Maruwa), and businesses delivering defensive growth on attractive valuations, often due to being less geared to the dominant AI narrative (such as Linde). On the other side of the ledger, we have exited names which either we considered to be fully valued (e.g. Pentair), or where we no longer had our conviction in the investment thesis (e.g. Sanhua).

We have also been dynamic in the sizing of positions within the portfolio. Towards the end of last year, we began reducing IEM's aggregate exposure to software, bringing this down further in Q1. We did so in anticipation of the fact that price to earnings multiples would come under pressure as concerns around the potential for AI-related disruption entered the mainstream. While we retain conviction in the long-term investment case, managing the position size enabled us to mitigate the sector's short-term underperformance. As valuations have become more appealing, we have selectively started to increase some of these positions.

Similarly, we started to review our exposure to water infrastructure stocks towards the end of 2025. This area of the thematic taxonomy has been a dependable source of earnings growth in recent years. However, we took a view that the risk/reward ratio for several stocks was less immediately attractive. In addition to exiting Veralto and Pentair, we significantly reduced our weighting in Xylem. After a period of material underperformance for these stocks, and as valuations re-set to much more attractive levels, we started to revisit our exposures and re-initiate a position in Veralto.

Buys	Sells
Keppel DC REIT (Cloud Computing, Singapore)	Ashtead (Resource Circularity & Efficiency, UK)*
Linde (Industrial Energy Efficiency, US)	Blackline Safety (Environmental Testing & Monitoring, Canada)
Maruwa (Advanced Road Vehicle & Devices, Japan)	Boralex (Renewable Energy Developers & IPPs, Canada)
Nextpower (Solar Energy Generation Equipment, US)	Nibe (Buildings Energy Efficiency, Sweden)
Sunbelt Rentals (Resource Circularity & Efficiency, US)*	Pentair (Water Treatment, US)
Veralto (Environmental Testing & Monitoring, US)	Sanhua Intelligent Controls (Buildings Energy Efficiency, China)
Versigent (Advanced Road Vehicles & Devices, US)*	Synopsys (Efficient IT, US)
	Versigent (Advanced Road Vehicles & Devices, US)*

*These transactions are the result of corporate actions rather than discrete buy/sell decisions. Sunbelt Rentals is the new name for Ashtead, which rebranded after relisting in the US. Versigent is the legacy business which was spun out of Aptiv, the latter of which remains in the portfolio.

Outlook

Equity markets are finely balanced. The threat of an energy-induced inflation spike appears contained for now, although the volatility of geopolitics may alter this. Meanwhile, US employment and overall earnings growth have proven resilient. Market gains in the second quarter of the year centred on AI-related infrastructure, but leadership broadened periodically beyond the largest technology companies. Historically, broader market participation of this kind has been more supportive for the strategy's small and mid-cap bias.

Against this backdrop, the portfolio remains balanced. High-growth thematic exposure is complemented by defensive compounders and selective cyclical opportunities. While overall volatility has spiked only fitfully, shares in individual companies are moving sharply even in the absence of significant news. Accordingly, the team has taken advantage of market dislocations to initiate or add to oversold, high-conviction holdings, while exiting positions where the investment case has played out or is reflected in valuations.

Going into the second half of the year, the strategy remains consistent in its offering. The portfolio has an active share of around 97% against the MSCI ACWI, no allocation to mega-cap technology stocks, and low holdings correlation with peers. At the same time, we believe valuations reflect a superior expected rate of earnings growth relative to global markets, thanks to a range of structural environmental themes. The result year-to-date has been encouraging, with multiple sources of return across different market environments.

Investment Managers

Fotis Chatzimichalakis

Sanjeev Lakhani

29 September 2026

Interim Management Report

The Directors are required to provide an Interim Management Report in accordance with the Financial Conduct Authority ("FCA") Disclosure Guidance and Transparency Rules ("DTR"). The Directors consider that the Chair's Statement and the Manager's Report within the Half-yearly Report, provide details of the important events which have occurred during the six months ended 30 June 2026 ("Period") and their impact on the financial statements. The statement on related party transactions and the Directors' Statement of Responsibility, the Chair's Statement and the Manager's Report together constitute the Interim Management Report of the Company for the Period. The outlook for the Company for the remaining six months of the year ending 31 December 2026 is discussed in the Chair's Statement and the Manager's Report.

Details of the largest ten investments held at the Period end and the structure of the portfolio at the Period end is analysed within the Half-Yearly Report.

Principal risks and uncertainties

The principal risks and uncertainties facing the Company are summarised below:

(i)         the Company has served notice to terminate the appointment of the Manager. That notice will expire on 31 July 2027. In the meantime, the Board has commenced a strategic review to appoint an alternative investment manager or pursue a strategic alternative which best suits shareholders' interests going forward. The future success of the Company therefore depends on a successful outcome of that strategic review process.

(ii)         economic and market risks - price movements of the Company's investments are highly correlated to market movements and general economic conditions. This is even more so for investee companies with small market capitalisation;

(iii)        the Company's objective and strategy do not continue to attract investors - the Company invests in companies operating in environmental markets. There is a risk in such markets that change to governmental support, technology costs or customer demand may have an adverse effect;

(iv)        share price trades at excessive discount to net asset value - returns to shareholders may be affected by the level of discount at which the Company's shares might trade;

(v)        underperformance of the Investment Manager - Consistent long-term underperformance by the Investment Manager may lead to poor performance of the Company compared to its benchmark comparators and peers, a widening of discount to NAV, a reduction in capital and dissatisfied shareholders;

(vi)        failure or breach of information security (IT) - including cyber-security and physical security risks - failure of IT or physical security could potentially lead to breaches of confidentiality, data records being compromised and the inability to make investment decisions. In addition, unauthorised physical access to buildings could lead to damage or loss of equipment; and

(vii)       operational risk - the management of the investment portfolio and other key services have been delegated to third party service providers. Failure by any service provider to carry out its obligations to the Company could have a material adverse effect on the Company's performance or prevent the accurate reporting and monitoring of the Company's financial position.

Emerging risks are considered by the Board at its quarterly meetings and by the Audit Committee as part of its risk management and internal control review. Failure to identify emerging risks may cause reactive actions rather than being proactive and the Company could be forced to change its structure, objective or strategy and, in worst case, could cause the Company to become unviable or otherwise fail.

Specifically, the risks posed by ongoing economic uncertainties (including tariffs), geopolitical tensions and armed conflicts continue to be monitored by the Board. The Manager and other key service providers provide periodic reports to the Board on market impact and operational resilience to these events.

The Company's Annual Report for the year ended 31 December 2025 contains more detail on the Company's principal risks and uncertainties, including the Board's ongoing process to identify, and where possible mitigate, emerging risks (pages 35 to 37 of the Annual Report). Detail is also provided on other risks that, whilst not being identified as principal risks after mitigation controls are applied, are relevant risks to the Company. The Annual Report can be found on the Company's website at www.iemplc.co.uk.

In the view of the Board, other than as described in sub-paragraph (i) above, the principal risks and uncertainties facing the business are broadly the same as those in the published annual report and financial statements for the year ended 31 December 2025. These risks and uncertainties remain applicable to the remaining six months of the year.

Related party transactions

Details of the investment management arrangements are provided in the 2025 Annual Report. There have been no changes to the related party transactions described in the 2025 Annual Report that could have a material effect on the financial position or performance of the Company.

Going concern

This Half-yearly Report has been prepared on a going concern basis. The Directors consider this the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of this report. In reaching this conclusion, the Directors considered the liquidity of the Company's portfolio of investments, as well as its cash position, income and expense flows. The Company's net assets as at 30 June 2026 were £207.5 million, of which £205.1 million was in quoted investments and cash totalled £2.2 million. The total expenses (excluding Exit Tender Offer costs, finance costs and taxation) for the six months ended 30 June 2026 were £3.5 million, while income was £4.7 million.

The Directors have considered the potential effect of continuing geopolitical tensions and economic uncertainties on the Company's portfolio of investments and that any future prolonged and deep market decline would likely lead to falling values in the Company's investments and/or reduced dividend receipts. However, as explained above, the Company has more than sufficient liquidity available to meet its expected future obligations.

Board of Directors

29 September 2026

Statement of Directors' Responsibilities

The Directors confirm to the best of their knowledge that:

·      the condensed set of financial statements contained within the Half-yearly Report has been prepared in accordance with FRS 104 Interim Financial Reporting and gives a true and fair view of the assets, liabilities, financial position and return of the Company; and

·      the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules.

Caroline Bault

Chair

29 September 2026

Condensed Income Statement

Unaudited

		Six months ended 30 June 2026			Six months ended 30 June 2025
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments		-	154,239	154,239	-	(39,368)	(39,368)
Net foreign exchange losses		-	(3,310)	(3,310)	-	(5,459)	(5,459)
Income	4	4,696	-	4,696	10,434	-	10,434
Investment management fee		(651)	(1,952)	(2,603)	(869)	(2,607)	(3,476)
Other expenses		(852)	(1,423)	(2,275)	(821)	-	(821)
Return on ordinary activities before
finance costs and taxation		3,193	147,554	150,747	8,744	(47,434)	(38,690)
Finance costs		(310)	(931)	(1,241)	(525)	(1,577)	(2,102)
Return on ordinary activities before
taxation		2,883	146,623	149,506	8,219	(49,011)	(40,792)
Taxation	5	(660)	3	(657)	(580)	32	(548)
Return on ordinary activities after
taxation		2,223	146,626	148,849	7,639	(48,979)	(41,340)
Return per ordinary share	6	1.29p	84.86p	86.15p	3.44p	(22.08p)	(18.64p)

The total column of the Income Statement is the profit and loss account of the Company.

The supplementary revenue and capital columns are provided for information purposes in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

Return on ordinary activities after taxation is also the "Total comprehensive income for the period".

The accompanying notes form part of these financial statements.

Condensed Balance Sheet

Unaudited

		As at	As at
		30 June	31 December
		2026	20251
	Notes	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	3	205,097	892,485
Current assets
Dividends receivable		177	520
Sales awaiting settlement		627	-
Other debtors		33	12
Cash and cash equivalents		2,180	10,601
		3,017	11,133
Creditors: amounts falling due within one year
Trade and other payables		(610)	(3,325)
Revolving credit facility	7	-	(34,933)
		(610)	(38,258)
Net current assets/( liabilities)		2,407	(27,125)
Total assets less current liabilities		207,504	865,360
Non-current liabilities
Loan Notes	7	-	(52,116)
Net assets		207,504	813,244
Capital and reserves: equity
Share capital	8	15,742	30,562
Capital redemption reserve		24,697	9,877
Special reserve		-	181,050
Capital reserve		157,470	578,290
Revenue reserve		9,595	13,465
Shareholders' funds		207,504	813,244
Net asset value per share		534.0p	427.1p

1 Audited.

Approved by the Board of Directors and authorised for issue on 29 September 2026.

Caroline Bault, Chair

Impax Environmental Market plc incorporated in England with registered number 04348393.

The notes form part of these financial statements.

Condensed Statement of Changes in Equity

Unaudited

			Capital
		Share	redemption	Special	Capital	Revenue
Six months ended		capital	reserve	reserve	reserve	reserve	Total
30 June 2026	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Opening equity as at
1 January 2026		30,562	9,877	181,050	578,290	13,465	813,244
Return for the period		-	-	-	146,626	2,223	148,849
Dividends paid	10	-	-	-	-	(6,093)	(6,093)
Cost of share buy backs	8	-	-	(15,248)	-	-	(15,248)
Tender offer	8	(14,820)	14,820	(165,802)	(567,446)	-	(733,248)
Closing equity as at
30 June 2026		15,742	24,697	-	157,470	9,595	207,504
			Capital
		Share	redemption	Special	Capital	Revenue
Six months ended		capital	reserve	reserve	reserve	reserve	Total
30 June 2025	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Opening equity as at
1 January 2025		30,562	9,877	370,043	603,177	14,425	1,028,084
Return for the period		-	-	-	(48,979)	7,639	(41,340)
Dividends paid	10	-	-	-	-	(7,470)	(7,470)
Cost of share buy backs	8	-	-	(126,472)	-	-	(126,472)
Closing equity as at
30 June 2025		30,562	9,877	243,571	554,198	14,594	852,802

The notes form part of these financial statements.

Condensed Statement of Cash Flows

Unaudited

		Six months ended	Six months ended
		30 June 2026	30 June 2025
	Notes	£'000	£'000
Operating activities
Return on ordinary activities before finance costs and taxation*		150,747	(38,690)
Less: Tax deducted at source on income from investments		(167)	(580)
Foreign exchange losses		3,718	3,765
Adjustment for (gains)/losses on investments		(154,239)	39,368
Decrease in other debtors		324	1,532
Decrease in other creditors		(1,901)	(725)
Net cash flow from operating activities		(1,518)	4,670
Investing activities
Sale of investments		928,971	445,945
Purchase of investments		(216,437)	(304,605)
Net cash flow from investing activities		712,534	141,340
Financing activities
Dividends paid	10	(6,093)	(7,470)
Repayment of revolving credit facility		(90,302)	-
Finance costs paid		(2,054)	(1,997)
Cost of share buybacks		(620,580)	(128,200)
Net cash outflow from financing activities		(719,029)	(137,667)
(Decrease)/increase in cash		(8,013)	8,343
Cash and cash equivalents at start of year		10,601	13,405
Effect of movements in exchange rates on cash held		(408)	(568)
(Decrease)/increase in cash		(8,013)	8,343
Cash and cash equivalents at end of year		2,180	21,180

*Cash inflow includes dividend income received during the period of £4,268,000 (six months ended 30June 2025: £11,667,000) and bank interest of £428,000 (2025: £142,000).

Changes in net debt

	Six months ended	Six months ended
	30 June 2026	30 June 2025
	£'000	£'000
Net debt at start of year	(76,488)	(69,711)
(Decrease)/increase in cash and cash equivalents	(8,013)	8,343
The effect of changes in foreign exchange rates	(2,548)	(3,765)
Repayment of revolving credit facility	34,933	-
Repayment of loan notes	52,116	-
Net debt at end of year	-	(65,133)

The accompanying notes form part of these financial statements.

Notes to the Financial Statements

1 Accounting policies

The Half-yearly Condensed Financial Statements have been prepared in accordance with FRS 104 'Interim Financial Reporting' issued by the Financial Reporting Council ('FRC') and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies in July 2022.

This Half-yearly Financial Report is unaudited and does not include all of the information required for a full set of annual financial statements. The Half-yearly Financial Report should be read in conjunction with the Annual Report and Accounts of the Company for the year ended 31 December 2025. The Annual Report and Accounts for the year ended 31 December 2025 were prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ('FRS 102') and received an unqualified audit report. The financial information for the year ended 31 December 2025 in this Half-yearly Financial Report has been extracted from the audited Annual Report and Accounts for the year ended 31 December 2025. The accounting policies in this Half-yearly Financial Report are consistent with those applied in the Annual Report for the year ended 31 December 2025.

2 Going concern

Basis of accounting

The Directors have adopted the going concern basis in preparing the accounts. Details of the Directors' assessment of the going concern status of the Company, which considered the adequacy of the Company's resources and took account of continued geopolitical and economic uncertainties, are given within the Half-Yearly Report.

3 Investments at fair value through profit or loss

Classification of financial instruments

Securities of companies quoted on regulated stock exchanges and any holdings in unquoted companies are classified as 'at fair value through profit or loss' and are initially recognised on the trade date and measured at fair value in accordance with sections 11 and 12 of FRS 102. Investments are measured at subsequent reporting dates at fair value by reference to their market bid prices. Any unquoted investments are measured at fair value, which is determined by the Directors in accordance with the International Private Equity and Venture Capital guidelines.

Changes in fair value are included in the Condensed Income Statement as a capital item.

The classifications and their descriptions are below:

FRS 102 requires classification of financial instruments within the fair value hierarchy be determined by reference to the source of inputs used to derive the fair value and the lowest level input that is significant to the fair value measurement as a whole. The classifications and their descriptions are below:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2

Level 2 investments are holdings in companies with no quoted prices. Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

		30 June 2026					31 December 2025
	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
	£'000		£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investments at fair value through
profit or loss
- Quoted	205,097		-	-	205,097	892,485	-	-	892,485
	205,097		-	-	205,097	892,485	-	-	892,485

4 Income

	Six months ended	Six months ended
	30 June 2026	30 June 2025
	£'000	£'000
Dividends from UK listed investments	422	1,701
Dividends from overseas listed investments	3,846	8,591
Total dividend income	4,268	10,292
Bank interest	428	142
Total Income	4,696	10,434

Dividends from overseas listed investments includes special dividends classified as revenue of £751,000 (2025: £179,000).

5 Taxation

Analysis of charge in the year

	Six months ended			Six months ended
	30 June 2026			30 June 2025
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Overseas taxation	660	-	660	580	-	580
Decrease in CGT provision	-	(3)	(3)	-	(32)	(32)
Taxation	660	(3)	657	580	(32)	548

The capital gains tax provision represents an estimate of the amount of tax provisionally payable by the Company on direct investment in Indian equities. It is calculated based on the long-term or short-term nature of the investments and the unrealised gain thereon at the applicable tax rate at the period end.

6 Return per ordinary share

	Six months ended	Six months ended
	30 June 2026	30 June 2025
	£'000	£'000
Revenue return after taxation (£'000)	2,223	7,639
Capital return after taxation (£'000)	146,626	(48,979)
Net return (£'000)	148,849	(41,340)
Weighted average number of ordinary shares in issue during the period	172,791,517	221,753,862

Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period.

There is no dilution to return per share as the Company has only ordinary shares in issue.

7 Loan Notes and revolving credit facility

During the period, the Company repaid in full all amounts outstanding under its privately placed notes (the "Loan Notes") issued to funds managed by Pricoa Private Capital and revolving credit facility ("RCF") with Bank of America. Following repayment, the Loan Notes were redeemed and the RCF was cancelled. Accordingly, the Company had no borrowings outstanding at 30 June 2026.

The movement in borrowings during the period was as follows:

	£'000
Borrowings at 1 January 2026	87,049
Repayment of Loan Notes	(52,116)
Repayment of RCF	(34,933)
Borrowings at 30 June 2026	-

The maturity profile of the Loan Notes and RCF are as follows:

	Six months ended	Year ended
	30 June 2026	31 December 2025
	Book cost	Book cost
	£'000	£'000
RCF payable in less than one year	-	34,933
Loan Notes payable after more than one year	-	52,116
Total borrowing	-	87,049

The Company's Loan Notes and RCF were subject to the following covenants prior to their repayment and cancellation:

1) Adjusted asset coverage should not be less than 4:1 in respect of the RCF;

2) Borrowings expressed as a percentage of adjusted assets shall not exceed 35% in respect of the Loan Notes;

3) Net Asset Value should not be less than £260,000,000; and

4) The maximum permitted borrowing should not exceed that permitted in the Company's Articles of Association. There were no breaches of any covenants either in the period prior to the repayment and cancellation of the facilities, or during the prior year.

8 Share capital

	Six months ended		Six months ended
	30 June 2026		30 June 2025
	Number	£'000	Number	£'000
Issued and fully paid shares of 10p each
Brought forward	190,410,579	19,041	239,861,519	23,986
Shares bought back and held in treasury	(3,349,232)	(335)	(33,725,441)	(3,373)
Shares bought back and cancelled	(148,202,139)	(14,820)	-	-
Carried forward	38,859,208	3,886	206,136,078	20,613
Treasury shares of 10p each
Brought forward	115,212,960	11,521	65,762,020	6,576
Shares bought back and held in treasury	3,349,232	335	33,725,441	3,373
Carried forward	118,562,192	11,856	99,487,461	9,949
Share capital	157,421,400	15,742	305,623,539	30,562

Tender Offer

During the period, the Company completed a tender offer pursuant to which it repurchased 148,202,139 ordinary shares of 10p each at a price of £4.94761953 per share, for total consideration of £733,247,797. The shares acquired represented approximately 77.83% of the Company's issued share capital prior to the transaction. Following completion of the tender offer, the repurchased shares were cancelled.

In addition to shares repurchased under the tender offer, during the six month period to 30 June 2026, 3,349,232 ordinary shares of 10p each (2025: 33,725,441) have been bought back and placed into treasury at a total cost of £15,248,000 (2025: £126,472,000).  

Since the period end and up to 28 September 2026, the latest practicable date before publication of this report, no further ordinary shares have been bought back.

9 Net asset value ("NAV") per ordinary share

	Six months ended	Year ended
	30 June 2026	31 December 2025
Net asset value ("NAV") (£'000)	207,504	813,244
Closing balance of shares in issue, excluding shares held in treasury	38,859,208	190,410,579
NAV per share	534.0p	427.1p

10 Dividends

(a) Dividends paid in the period

	30 June 2026		30 June 2025
	Rate	£'000	Rate	£'000
Interim dividend in lieu of final dividend for the previous year	3.20p	6,093	3.20p	7,470

(b) Dividends payable in respect of the period, which is the basis on which the requirements of s1158-1159 of the Corporation Tax Act 2010 are considered

	30 June 2026		30 June 2025
	Rate	£'000	Rate	£'000
First interim for the current year1	2.00p	777	1.90p	3,858

1 The first interim dividend payable is based upon the 38,859,208 ordinary shares in issue on 28 September 2026, which is the latest practicable date before the publication of this report.

11 Transactions with the Manager

The Company's transactions with related parties in the period were with the Directors. There have been no transactions between the Company and its Directors during the period other than amounts paid to them in respect of expenses and remuneration for which there are no outstanding amounts payable at the period end (31 December 2025: nil and 30 June 2025: nil).

Fees payable to the Manager are shown in the Income Statement. At 30 June 2026, the fee outstanding to the Manager was £310,000 (31 December 2025: £2,220,000 and 30 June 2025: £1,119,000).  

12 Status of this report

These financial statements are not the Company's statutory accounts for the purposes of section 434 of the Companies Act 2006. They are unaudited. The Half-yearly Financial Report will be made available to the public at the registered office of the Company. The report will be available in electronic format on the Company's website (www.iemplc.co.uk).

The information for the year ended 31 December 2025 has been extracted from the last published audited financial statements, unless otherwise stated. The audited financial statements have been delivered to the Registrar of Companies. BDO LLP reported on those accounts and their report was unqualified and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.

The Half-yearly Financial Report was approved by the Board on 29 September 2026.

For further information contact:

Juniper Partners Limited	[phone]
Company Secretary

END

 

END