REG - Impax Environ Mkts - Annual Financial Report
03/04/2025 07:00
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RNS Number : 4772D Impax Environmental Markets PLC 03 April 2025
LEI: 213800RAR6ZDJLZDND86
IMPAX ENVIRONMENTAL MARKETS PLC ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDING
31 DECEMBER 2024
London, 3 April 2025. Impax Environmental Markets plc (LSE: IEM) (the
"Company" or "IEM"), the UK's largest environmental investment trust investing
in the transition to a more sustainable economy, today announced its full-year
results for the year ended 31 December 2024.
· Net asset value ("NAV") per ordinary share of 427.6p (31 Dec 2023:
434.3p)
· Net assets at 31 Dec 2024 of £1,026m (31 Dec 2023: £1,221m) -
change primarily due to the sale of positions to fund share buy-backs
· Ordinary share price of 385.5p (31 Dec 2023: 400.0p)
· Ongoing charges of 0.84% (31 Dec 2023: 0.83%)
· Total dividend paid during 2024 financial year of 5.0pps, an increase
of 8.7% (2023: 4.6pps)
· The Company bought back 41.25 million shares during the year,
representing 14.7% of the issued share capital, spending £161m.
Glen Suarez, Chairman of Impax Environmental Markets, comments:
"The past year has brought investors well-documented geopolitical and
macroeconomic challenges, as well as a highly concentrated equity market.
Nevertheless, the long-term investment case for environmental markets remains
intact, irrespective of short-term policy development and political rhetoric.
"The Board acknowledges IEM's short-term share price performance over the
period , but we are encouraged that the underlying earnings of companies in
our portfolio are growing faster than the benchmark and there is every reason
to think that this trend will accelerate over the next decade and the current
low valuation levels of companies in the environmental markets represent a
huge investment opportunity and differentiated proposition from the MSCI ACWI.
"Like almost all the investment trust sector, the Company's shares have traded
at a discount to NAV. During 2024, the Company bought back a considerable
number of shares. This has been to support shareholders and mitigate this
price volatility. The Board will continue to exercise its authority to buy
back or issue shares depending on the circumstances and in the interests of
shareholders.
"In the third quarter of the year, the Board took the opportunity to consult
with a large proportion of the shareholder base representing over half of the
issued share capital to listen and discuss the Company's thematic mandate as
well as understand their perceptions of the Company.
"The Board undertook a thorough review of IEM's investment proposition and
strategy. This included stock selection, portfolio composition, risk
management, challenge and oversight, buy-sell discipline, management of
leverage risk and opportunity and geographical and factor exposure.
"Upon completion of this review, the Board has concluded that the Manager has
a unique investment approach with substantial research depth and skill in this
area of the market and, put simply, continues to be the right Manager for the
Company.
"At the AGM in May 2025, shareholders will have the opportunity, as they do
every three years, to vote on the continuation of the Company as an investment
trust. The Directors strongly recommend that shareholders vote in favour of
the continuation resolution. We are pleased to invite shareholders to
attend the AGM in person to meet the Board and the investment managers and to
vote.
"IEM is the only investment trust giving access to both shareholders and
potential investors to the unique and exciting growth dynamics of
environmental markets. Over rolling 5-year periods over the last 10 years, IEM
investors have enjoyed market-beating returns 70% of the time. I remain
assured that the transition to a more sustainable economy, catalysed by
climate change, will drive stock market returns in the years to come. Your
Company represents the ideal way to capitalise on one of the most significant
and enduring themes of this century."
Contact:
Montfort Communications, iem@montfort.london (mailto:iem@montfort.london)
Gay Collins, Charlie Barnes 07798 626282 / 07471475485
Impax Asset Management, p.french@impaxam.com (mailto:p.french@impaxam.com)
Paul French 0203 912 3032
IEM at a Glance
IEM Overview
IEM provides its shareholders with exposure to this exciting growth story. The
Company invests in a well-researched and diversified portfolio of
fast-growing, globally-listed companies providing innovative solutions to
environmental challenges or improving resource efficiency. IEM's investment
opportunity set is also likely to expand rapidly as regulation, technological
innovation, and consumer preferences accelerate demand for sustainable
solutions. The Board believes this approach can deliver superior
risk-adjusted returns over the long-term.
IEM provides its shareholders with exposure to this exciting growth story. The
Company invests in a well-researched and diversified portfolio of
fast-growing, listed businesses. IEM's Board of Directors (the "Board")
believes that investing in these companies can deliver superior risk-adjusted
returns over the long-term. This thesis is borne out in the superior earnings
growth portfolio companies have delivered compared to global equity markets
over the past decade. Looking forward, IEM continues to benefit from an
expanding opportunity set of investable companies harnessing structural
drivers. These include the digitalisation of industrial supply chains, rising
demand for cost-efficient electricity and the increasingly urgent need for
climate change adaptation.
This thesis is borne out in IEM's portfolio. Earnings delivered by portfolio
companies over the past decade have surpassed those of broader global equity
markets. However, like all equity investments, IEM's short-term performance
can be influenced by macroeconomic issues and sentiment.
The Manager
The Manager of IEM, Impax Asset Management (AIFM) Limited (the "Manager", or
"Impax"), uses a proprietary classification system to define these higher
growth 'Environmental Markets'. This approach has been in place since IEM was
founded in 2002 and is overseen by a dedicated Impax team.
Today the classification system is made up of six sectors: Energy, Clean and
Efficient Transport, Water, Circular Economy, Smart Environment and
Sustainable Food. The range of activities included has naturally grown over
the years as technologies advance and more industries begin to address the
environmental challenges which they face.
To qualify for IEM's investable universe, a company must derive at least 50%
of its revenues from these Environmental Markets. As a result, IEM's
investments are predominantly in small and medium-sized companies, which tend
to focus their business models on fewer activities.
The Manager then follows a rigorous, performance-focused process based on
bottom-up research to invest in proven and profitable companies. The breadth
of the Environmental Markets opportunity set enables Impax to create a
diversified portfolio spanning traditional sector boundaries. Once a company
is purchased, its share price is continually monitored within the context of a
live 'valuation range' which incorporates worst and best-case assumptions.
The Manager also maintains an active dialogue with the companies in which it
invests. Doing so is central to optimising shareholder returns, helping to
promote greater transparency around corporate issues and risk. Engagement
outcomes, company valuations, as well as portfolio risk metrics and the
macro-outlook, all inform buy and sell decisions.
The Company
IEM's goal is to deliver financial returns for shareholders. It benefits from
an active, committed Board, as well as competitive fees. Additionally, the
investment managers are personally invested, thus aligning themselves
financially with shareholders.
By IEM focusing on Environmental Markets, the portfolio generates outcomes
beyond financial returns. Annually, for each £1 million invested, enough
clean, renewable energy is generated to power 70 homes, and the equivalent of
422 households' water consumption and 17 tonnes of domestic waste are saved.
Whilst the Manager does not target the UN Sustainable Development Goals in the
investment process, 81% of portfolio company revenues were aligned with them
in 2024.
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 Information
At 31 December 2024 2024 2023
Net asset value ("NAV") per ordinary share with debt at bookcost 428.6p 434.9p
NAV per ordinary share with debt at fair value(1) 427.6p 434.3p
Ordinary share price discount to NAV(1,3) 9.8% 7.9%
Ordinary share price 385.5p 400.0p
Ongoing charges(1) 0.84% 0.83 %
Net assets(1,3) £1,026m £1,221m
Performance Summary(2)
( )
For the year ended 31 December 2024 2024 2023
% change
NAV total return per ordinary share(1,3) (0.4%) 4.5 %
Share price total return per ordinary share(1) (2.6%) (3.7%)
Comparator Benchmarks
MSCI AC World index(4) 19.6% 15.3%
FTSE ET100 index(4) 16.8% 18.3 %
1 These are alternative performance measures ("APMs").
2 Total returns in sterling for the year to 31 December 2024.
3 With debt at fair value.
4 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 within the Annual Report.
STRATEGIC REPORT
Chairman's Statement
Dear Shareholder
The business of investment is never straightforward and so 2024 has proved.
But while the last twelve months have seen challenges, future opportunities
firmly present themselves for IEM.
Over the course of the year, the Board undertook a thorough review of IEM's
investment proposition and strategy. We concluded that the fundamental
investment hypothesis on which the Company's strategy is based, namely that
companies operating in "Environmental Markets"(1) will outperform the broader
market over the long term regardless of public policy, remains robust. To give
you just one example, increasing air temperatures, particularly in summer, are
boosting demand for air-conditioning globally and that demand will continue
regardless of politics and public policy.
The Company's goal is to produce long-term returns and it is only to be
expected that there will be temporary periods when returns fluctuate either
side of those of global equities. Investing ultimately is a long term game of
hard work and patience.
Performance
For the year ended 31 December 2024, the Company's net asset value fell 0.4%,
while the global equities comparator index (the MSCI All Country World Index,
"MSCI ACWI") returned 19.6%. The share price total return decreased by 2.6%.
This reflected the widening of the Company's discount during the year by 1.9%,
as discussed in the "Discount" section below.
The Board acknowledges IEM's short-term share price performance over the
period, but we are encouraged that the underlying earnings of our portfolio
companies are growing faster than the benchmark. Our review of IEM's offering
underlined continued investor appetite for its unique proposition as a
diversified Environmental Markets investment which provides exposure to global
opportunities. This recognises that it is uncorrelated to the 'Magnificent
Seven', which have disproportionately skewed the performance of the equity
markets over the past few years.(2)
The Magnificent Seven, fossil fuel and most financial businesses are not
eligible for inclusion in our portfolio as they do not meet IEM's key
criterion - portfolio companies should be "pure play" companies which derive
at least 50% of their revenues from the environmental markets as we have
defined them. Despite this, at the sector level there were robust gains in
construction and digital infrastructure.
When considering shareholder returns over time, we see a different picture to
the one when looking at a single snapshot such as this annual report's one
year time period. As an example, the graph in the Annuual Report, showing
rolling 5-year returns over the last 10 years, demonstrates something else - a
much more consistent picture where investors have enjoyed market-beating
returns 70% of the time:(3)
1 As set out on within the Annual Report.
2 The "Magnificent Seven" are identified as Microsoft,
Amazon, Meta, Apple, Nvidia, Alphabet and Tesla.
3 Source: Morningstar, showing rolling 5 year returns
ending over the last 5 years. This shows how returns over different time
periods have fluctuated and provides a clearer picture as to how the Manager
has delivered against the Company's objective over time.
The other relevant point is that the earnings of portfolio companies have been
growing faster than the earnings of companies in the index, as we can see in
the chart in the Annual Report.
This also supports the Manager's contention that the very low valuation levels
of companies in the Environmental Markets represent a huge opportunity
especially given the turn in the global markets since the start of the year.
Thus, we have a very buoyant view of the potential that IEM offers. The
portfolio's differentiation versus mainstream equity markets is a significant
part of its appeal and the Board notes the very high (c.99%) active share that
IEM offers against wider global markets.(1)
As the chart in the Annual Report exhibits, one clear market trend is the
concentration we currently see in the US stock market, which forms such a
large proportion of global markets. By way of example, the top ten stocks by
market cap of the S&P 500 account for 32.4% of the index's total market
capitalisation, as set out below.(2) This has been a feature of recent years,
reflecting the popularity of mega-cap technology stocks like Alphabet
(Google), Meta (Facebook) and Microsoft.
None of these companies offer pure play exposure to Environmental Markets. The
key is to position the portfolio to benefit from themes that will be in play
as the market moves into the next cycle.
Market sentiment around this concentration in these mega-cap technology stocks
has moved around over the past year. Mixed earnings reports and declining
interest rates are driving a change in that sentiment as the technology these
companies are delivering plays its role in the successful transition to a more
sustainable economy. As a result, the market is moving to focus on companies
embracing the use of that technology to deliver their aims, seeing them as
being much better placed to deliver returns.
1 Against MSCI ACWI. Source: MSCI as at 31 December 2024.
2 Morningstar, MSCI, Standard & Poor's. Weights shown
by issue, and they are the sum of the top 10 holdings of each index on a
monthly basis. As at 31 August 2024.
Benchmark
One of the issues shareholders have faced in understanding the performance of
IEM is that a large percentage of the MSCI ACWI benchmark is made up of stocks
that cannot be held in the IEM portfolio. And, as referenced in the Company's
latest half-yearly financial report, the FTSE Environmental Technology 100
Index ("FTSE ET100"), which we have historically used, no longer represents
the best reflection of the opportunity set. To improve the standard of our
reporting and to understand more objectively the nature of returns and the
performance of the Manager, the Board is working with the Manager to introduce
a new benchmark to reflect the opportunity set. I will have more to share on
this in the coming period and expect to be updating shareholders on an
alternative, after thoroughly testing it as a comparator measure of success.
Discount
Like almost all the investment trust sector, the Company's shares have traded
at a discount to NAV. This reflects a number of different factors, including
negative sentiment towards the UK market as a whole, differences in the
direction of interest rates globally and within the UK and the perceived
performance of the Company relative to its benchmark.
The discount is actively monitored by the Board and the Company's corporate
brokers. Although your Board sees discounts as an opportunity to invest, it
also takes the view that buybacks are useful to dampen share price volatility.
At 31 December 2024, the Company's shares traded at a discount to NAV, with
debt at fair value, of 9.8%. At the previous year end, shares were trading at
a 7.9% discount to NAV. During the year the shares traded between a discount
of 8.1% and 17.2% with an average of 11.1%.
Against this backdrop, the discount widened in the second half of this period
as the market became nervous as investors digested the implications of Rachel
Reeves' first Budget. This affected almost all investment trusts, which saw
the discounts across all trusts on average widen from 13.7% to 15.2% during
2024.(1) During the year, the Company bought back some 41.25 million shares,
representing 14.7% of the issued share capital at the start of the year, in
order to support shareholders and mitigate this price volatility.
The Board will continue to exercise its authority to buy back or issue shares
depending on the circumstances in the interests of shareholders.
Following this year's buybacks, there were 239.9 million shares in circulation
at the year-end (2023: 281.1 million), excluding 65.76 million shares held in
treasury (2023: 24.5 million).
The Board believes that the current level of the discount - taken with the
potential for NAV outperformance, as discussed, offers investors an attractive
entry point given the turn in the markets. Recent research from the
Association of Investment Companies(2) shows how previous periods of elevated
discounts have ended with those discounts narrowing, contributing to strong
returns - indeed, the average investment trust returned 86.5% in five-year
periods that began with double-digit discounts, compared to the 53.8% return
achieved over five years when investing at discounts narrower than 10%.(3)
IEM's discount is 10.7% as at 31 March 2025, the latest practicable date prior
to publication of the report and the figures above and chart in the Annual
Report suggest a clear correlation between a greater potential for returns and
historically elevated levels of trust discounts (as is the case now):
1 Investment trust 2024 review (updated) | The AIC.
2 "Longest period of double-digit discounts for 30 years
presents investors with opportunity" AIC, 3rd February 2025.
3 As defined by AIC as excluding 3i and venture capital
trusts.
Dividend
IEM's net revenue return for the year was £12 million, compared with £14.4
million in 2023.
IEM's distribution policy, as approved by shareholders at the 2024 AGM, is to
declare two dividends each year. On 7 August 2024, the Board announced a
first interim dividend for this financial year of 1.8 pence per share, which
was paid on 5 September 2024. The second interim dividend of 3.2 pence per
share was declared on 30 January 2025 and paid on 7 March 2025. The total
dividend per share paid for 2024 was therefore 5.0 pence per share, an
increase of 8.7% on the 4.6 pence paid in respect of 2023.
It remains the Board's intention to pay out substantially all earnings by way
of dividends, the quantum of which is affected both by the level of dividends
received by the Company and by the number of shares in issue at the relevant
record date. The Board does not expect dividends to form a significant
proportion of total return in the near future.
Gearing
The Board and the Manager believe that gearing, or the ability to borrow
capital to invest, is an attractive feature of investment trusts and can
enhance long-term performance. The Company has used gearing for a number of
years and has a combination of fixed and floating rate debt with a mix of
maturity dates and interest rates.
At the year end the aggregate of the Company's borrowings was £83.1 million,
giving net gearing of 7.6% (2023: £87.1 million and 6.2%, respectively).
A breakdown of the Company's borrowings at 31 December 2024 follows.
The Company has €60 million of privately placed notes ("Loan Notes"), as set
out in the table below.
Loan Loan Maturity Interest rate
amount
amount
30 September
€ million
£'million
20 16.5 2030 Floating: 6m
EURIBOR +1.35%
30 24.7 2033 Fixed: 4.48%
10 8.2 2035 Fixed: 4.63%
The Company also has a two-year £80 million multi-currency revolving credit
facility which has a floating interest rate priced at reference rate +1.6%. An
amount of €40.8 million (equivalent to £33.7million) was drawn down at the
year end (2023: €40.9 million and £35.3 million, respectively).
At the year end, the weighted maturity of the Company's borrowings was 5.3
years and the mix of fixed to floating was 40%:60% (2023: 6.4 years and
40%:60%, respectively).
Sustainability label
In November, the Manager and the Board agreed to apply the "Sustainability
Impact" label to the Company, within the FCA's Sustainability Disclosure
Requirements. The label reflects the fact that the Manager applies an
investment process which derives, as a function of its workings, a range of
clear impacts, which we set out within the Annual Report. But shareholders
should not doubt that the business of investment for long term financial
returns is the clear priority of the Manager and of IEM. The Sustainability
Impact label offers shareholders a clear view on what they are supporting when
investing in the Company.
Consultation with shareholders
The Board has taken the view that the upcoming Continuation Vote (see below)
represents an opportunity to challenge the Company and its investment
proposition.
With this in mind, in the third quarter of the year, the Board took the
opportunity to consult with a large proportion of the shareholder base
representing over half of the issued share capital to listen and discuss the
Company's thematic mandate as well as understand their perceptions of the
Company, its performance, fees, capital structure, the Manager and the role
that the Company plays in their portfolio. The results of this extensive
engagement were supportive of the Company and its strategy and I outline the
Board's reasoning to shareholders on the specifics of the Continuation Vote
below. The Board is committed to continuing a high level of shareholder
communications during 2025.
The Board
IEM has a Board with considerable collective knowledge, balanced across
activities in the investment arena. The Board altogether has the experience
and skill to support and challenge the Manager, as well as assess and put in
place measures to mitigate enterprise risks that arise beyond the investment
process.
On 1 January 2024, we welcomed Elizabeth ("Liz") Surkovic to the Board as an
independent non-executive director. Liz brings with her a wealth of experience
in environmental policy making and regulation in the private and public
sectors. A short biography is set out within the Annual Report.
I would like to thank my fellow directors for the time, contribution and the
judgement they have brought to bear on the issues affecting the Company this
year.
The Board recognises the importance and value of diversity on the Board. I am
pleased to report that the Board meets the UK Listing Rules targets on gender
diversity, female representation in a senior role, and ethnic representation
on the Board.
The Manager
I would like to remind shareholders that the Board is fully independent of the
Manager and one of the functions of the Board is to evaluate its performance
and to decide whether the interests of the Company and its shareholders are
best served by the continuing appointment of the Manager.
The Board has a strong track record of holding managers to account. As Chair
of another UK listed investment trust, I have previously replaced the manager,
and this Board would follow the same course of action should it lose faith in
the Manager's investment process and did not believe the Manager was the right
party to deliver the long-term goals of IEM's shareholders.
As such, during the year, the Board undertook both a qualitative and
quantitative review of the Manager, its performance and processes.
As far as the qualitative review is concerned, the Board asked the Manager to
explain its investment process over a series of meetings in considerable
detail. We went through the process of stock selection, portfolio composition,
risk management, challenge and oversight, buy-sell discipline, the management
of leverage risk and opportunity and geographical and factor exposure.
As far as the quantitative review is concerned, the thesis of the strategy is
that over the long-term companies in the Environmental Markets will outperform
the broader market indices. We looked for evidence that the earnings of the
portfolio picks were growing faster than the market as a whole and that the
portfolio was being constructed in way that captured that opportunity set.
The Board noted the Manager's loss of its St James's Place mandate in November
and endeavoured to scrutinise it on behalf of shareholders on the reasons for,
and implications of, this loss. This was to assess whether the Manager has the
depth of research and financial capability to continue to provide the level of
portfolio management services that shareholders are entitled to expect at
reasonable fee levels.
As part of our ongoing assessment, the Board has supported the Manager's
evolution of the structure around IEM's portfolio management team, with
succession planning having been an important consideration throughout. This
planning has been several years in the making and includes the Manager's
appointment of Co-Chief Investment Officer, Charles French, and significant
enhancements such as the build-out of Impax's global equities research
function, which now includes 20 analysts with specialist expertise in
Environmental Markets.
Within this context, Bruce Jenkyn-Jones has informed the Board that he plans
to retire as a co-Investment Manager of IEM on 1 July 2026. Jon Forster and
Fotis Chatzimichalakis will continue as co-Investment Managers following
Bruce's retirement next year. The Board expects a seamless transition, aided
by the long notice period that Bruce has provided and the fact that Jon and
Fotis have worked together on the portfolio for eight years, with Jon having
been in place since 2004.
We will have a chance to mark Bruce's contribution in full over the coming
year, but for now, I'd like to take this opportunity to thank him for his
continued support and ongoing commitment to the Company.
In addition, as discussed in the Manager's Report, the Manager conducted its
own review of its investment process.
These extensive reviews - whether the Manager's own or derived from the
Board's questioning - have led to some portfolio changes being made which the
Manager references in its report and which the Board has welcomed. The
Manager's investment process is dynamic and continuously evaluated and it has
evolved over the 23 years of the Company's life (and the 27 years since the
Manager's foundation).
In light of this increased level of scrutiny through the various reviews, the
Board has concluded that the Manager has a unique investment approach with
substantial research depth and skill in this area of the market and, put
simply, continues to be the right Manager for the Company.
The Company offers long-term investors an unrivalled prospect of
outperformance over the long term from an uncorrelated set of underlying
companies from around the world.
Reporting
I am pleased to report that last year's edition was awarded the Best Report
& Accounts - Specialist Awards at the AIC Shareholder Communications Award
2024. The AIC judges highlighted the appealing design and effective
combination of graphics and text which brought the report to life. They
praised the chairman's statement, describing it as fresh and engaging. They
commended the environmental impact reporting which struck a good balance
between comprehensive detail and clear analysis.(1)
(1) Winners of the AIC Shareholder Communication Awards 2024
Press Release.
Annual General Meeting ('AGM')
We are pleased to invite shareholders to attend the AGM in person to meet the
Board and the investment managers. There will be a presentation and the
opportunity to ask questions. Shareholders are welcome to join through our
website at www.impaxenvironmentalmarkets.co.uk. As is our normal practice,
there will be live voting for those physically present at the AGM. We are not
able to offer live voting via the website, and we therefore request all
shareholders, and particularly those who cannot attend physically, to submit
their votes by proxy, ahead of the deadline of 3.00pm on 16 May 2025, to
ensure that their vote counts at the AGM.
Shareholders' questions for either the Board or the investment managers should
be submitted to clientservices@impaxenvironmentalmarkets.co.uk by 3.00pm on 16
May 2025. The Company's website at www.impaxenvironmentalmarkets.co.uk can be
used to access more insights and also subscribe for regular communications.
Continuation Vote
In addition to the normal business of the meeting, shareholders are being
asked to consider as an ordinary resolution the continuation of the Company as
an investment trust. The Company's Articles of Association provide for the
Company's shareholders to vote, once every three years, on whether the Company
should continue operating in its current form.
As I have referred to above, your Company is the only investment trust giving
access to both shareholders and potential investors to this unique and
exciting growth story. It has generated strong returns since inception, as
well as over an assortment of longer term time periods.
Annual Report and Circular and Notice of the AGM ("AGM Circular")
The Company has published a separate annual report and AGM Circular. The AGM
Circular contains the notice of the AGM and detailed explanations for each
resolution, including resolution 12 for the continuation vote.
The Directors strongly recommend that shareholders vote in favour of the
continuation resolution, as the Directors intend to do so in respect of their
shareholdings, as well as in favour of all the other resolutions.
Shareholders in receipt of this annual report and AGM Circular directly from
Company will receive a Form of Proxy in order to vote.
Shareholders who are invested in the Company via third party platforms or
intermediaries who hold shares on their behalf very commonly possess the right
to instruct the platform on how they wish their shares to be voted. The
Directors similarly urge these investors to exercise their rights and details
on how to make your instruction can be obtained from your platform or
intermediary. More information on voting can also be obtained from
the Association of Investment Companies at:
https://www.theaic.co.uk/how-to-vote-your-shares.
Outlook
Since the start of the year it has become increasingly clear that the markets
are undergoing a re-pricing, with the Magnificent 7, NASDAQ, and the US
markets underperforming other companies and markets. The market appears to be
focusing increasingly on corporate fundamentals, and the most important driver
of market returns in the long term is earnings.
The good news is that earnings of companies in our portfolio have been growing
faster than the earnings of the broader market indices over long periods and
there is every reason to think that this trend will accelerate over the next
decade, regardless of politics and policy. It remains our conviction that
investors focused on these transformations can target attractive risk-adjusted
returns as the transition to a more sustainable economy accelerates, and your
Company represents the ideal way to capitalise on that.
The Board believes that the Company is one of the few investment propositions
in the UK market that offers broad spectrum exposure to one of the most
significant and enduring themes of this century.
We can be sure that society will adapt to changes in the environment driven by
climate change and that these efforts will drive stock market returns,
regardless of policy development and political rhetoric. Opportunities for IEM
will abound and increase as the impact of climate change develops. The
thoughtful investor will take advantage of the mispriced risks and potential,
whatever shorter term political noise exists, with analysis, conviction and
patience.
Glen Suarez, Chairman
2 April 2025
Manager's Report
The fundamental trends which underpin Environmental Markets remain intact.
These include rising power demand and electrification, digitalisation and AI,
as well as climate change adaptation. These markets are driven by pure
economics, not public opinion. The companies within IEM's portfolio continue
to be well-positioned for long-term growth.
Recent performance has not reflected this, in large part thanks to a highly
concentrated equity market. As investment managers, we increased our weight in
high conviction names and bought positions in great companies at attractive
valuations. We believe the resulting combination of robust earnings growth,
relative value, and significant differentiation from broader markets, makes
IEM a compelling proposition heading into the decade ahead.
Global Equities in 2024
Global equity markets continued to challenge active equity investors in 2024.
At a headline level, returns as measured by the MSCI All Country World Index
("MSCI ACWI") came in at 19.6%. Yet this robust gain masks stark differences
across sectors and market capitalisations, as well as inconsistency over the
year. For Environmental Markets the re-election of Donald Trump to the White
House further complicated the picture.
Investors entered the new year expecting a swift start to interest rate cuts
from the US Federal Reserve ("Fed"). On 2 January 2024, market consensus
forecast the Fed would cut twice by May 2024, with six cuts ultimately
bringing rates to 4% by the end of the year.(1) In reality, both the European
Central Bank and the Bank of England beat the Fed to the punch, with investors
having to wait until 30 September 2024 for a 0.5% cut to US interest rates.
Relatively volatile economic data drove the Fed's cautious approach. While US
consumer price inflation cooled and unemployment ticked up, they refused to do
so uniformly. Equity investors eager to price in a world of more accommodative
monetary policy thus experienced several false starts. Instead, the year was
confirmed as one in which US interest rates really would remain "higher for
longer". Ultimately, US economic performance remained strong.
By contrast, growth in Europe and China continued to be lacklustre. Both
regions failed to recapture pre-pandemic levels of growth, with Europe hit by
higher energy prices and the loss of Chinese demand to support its export
market. By way of response, China launched successive stimulus announcements
towards the end of the year, including a US$1.4 trillion package for local
governments to reduce debt burdens and ramp up public spending.(2) Despite a
cut to interest rates, Eurozone manufacturing PMI data ended in contraction at
45.2.(3)
Geopolitical issues further complicated the macro picture. The resurgence of
open conflict in the Middle East renewed oil price volatility and stoked fears
of resurgent inflation, with Brent Crude peaking at $91 in April 2024.(4)
Similar concerns surrounded shipping costs, which threatened to spike as
companies avoided Houthi incursions in the Red Sea. Even before Donald Trump's
re-election, new and higher China tariffs from both President Biden and the
European Commission set the tone for more difficult trade relations.
With over 50% of the world's population going to the polls in 2024, investors
also faced several periods of electoral uncertainty. In the US, a late
Democrat candidate switch from Joe Biden to Kamala Harris added to an already
fractious and divided contest. The advance of right-wing parties in Germany
and France led to fresh elections being called, mirroring victories in the
European parliament. India and the UK also elected national governments,
although here the outcomes were more expected. With elections now largely
consigned to the rear-view mirror, markets can focus on how the victors acquit
themselves in power.
Amid this uncertainty, equity investors mostly stuck with what served them
well in 2023. Larger stocks continued to outperform smaller companies deemed
to be labouring under a higher cost of debt. The Magnificent Seven(5) and
other related technology stocks benefitted from greater AI uptake and
enthusiasm. Financials similarly powered on, thanks to elevated US interest
rates and the prospect of a more permissive mergers and acquisitions regime
under Donald Trump. As a result, around half the MSCI ACWI's returns in 2024
came from just ten stocks.
There were periods of stronger performance outside these areas. The prospect
of rate cuts led to a sharp - albeit unsustained - momentum reversal in Q3,
with utilities, real estate and small-caps all outperforming. Likewise,
China's stimulus boosted local equity markets, as well as stocks with greater
exposure to the region. However, this was not enough to offset US
outperformance with its growing line-up of trillion-dollar companies.
Consequently, global equity markets presented several challenges for IEM,
which holds most of its portfolio in mid and small-caps, holds no financial
stocks and owns fewer US companies than the MSCI ACWI.
1 Source: Bloomberg Fed Funds Futures as at 2 January 2024.
2 China unveils $1.4tn debt swap program to ease local
government pain - Nikkei Asia.
3 PMI - Purchasing Manager Index. Source, Bloomberg 31
December 2024.
4 Source: Bloomberg, 31 December 2024.
5 Microsoft, Amazon, Meta, Apple, Nvidia, Alphabet, Tesla.
Key Developments and Drivers for Environmental Markets
The Re-Election of Donald Trump
The prospect and ultimate re-election of Donald Trump was a constant theme for
2024. Yet while not an ideal outcome for Environmental Markets, it is far from
universally negative.
The actions of one Presidency will not derail the structural demand for
greater resource efficiency which underpins IEM's investment thesis. Even in
areas where Trump is actively unsympathetic, such as renewables, the breadth
of IEM's investable universe is sufficient to avoid either exposure to the US,
or potentially the sector altogether. This, combined with disciplined
portfolio construction meant IEM outperformed the MSCI ACWI over the course of
Donald Trump's last term in office.
Going into the election the investment managers explored various scenarios to
determine potential repercussions. The investment managers were able to
leverage this across the portfolio. This activity has since continued,
particularly given the sharp reaction in some stocks despite no concrete
policy.
Key priorities in the US included establishing what changes, if any, might be
made to the Inflation Reduction Act ("IRA"), Infrastructure Investment and
Jobs Act ("IIJA") and Chips & Science Act. Impax's base case is that total
repeal for these three key pieces of legislation remains unlikely given
broad-based Republican support. Slower investments, higher tariffs, and the
removal of tax credits for renewables and electric vehicles ("EVs") remain a
risk.
Consequently, the investment managers take a sector-specific approach. Where
downward moves look overdone, there are buying opportunities; where near-term
visibility is reduced and the longer-term outlook is uncertain, investment
cases must be reviewed.
The table on the below sets out how we currently see this Trump Presidency -
based on statements made at the time of writing - will affect each thematic
area of the portfolio. Under the "Impact" column, red means a potentially
less favourable set of circumstances for the portfolio; amber means
circumstances requiring care, with the potential for good opportunities; while
green represents the areas we see most likely to benefit. Further detail is
set out in the paragraphs below the table. In short, we see some real
potential opportunity in the years ahead of this Presidency.
Analysing medium-term implications for key thematic areas
Thematic Area Portfolio Impact Election Implication Investment Action
Weight (%)
Alternative Energy 7 Negative •Incremental risk to PTC(1)/ITC(2) subsidies. •Increased IPPs(3) trading below operating asset value.
•Historically negative views on offshore wind development. •Reduced already low wind and solar exposure.
•Operating assets not impacted.
•Mixed impact on biofuels mandates.
Transport Solutions 3 Neutral •EV Tax credits at risk, with potential roll back of sales targets. •EV(4) exposure manageable across diversified holdings.
•Improved outlook for transport pollution control.
Sustainable Food & Agriculture 13 Neutral •Read-across to farmer incomes from tariffs. •Limited exposure to theme.
•RFK(5) stance on food processing positive for natural ingredients. •Adding to Natural Ingredients recovery story.
•Construction tailwinds positive for sustainable forestry, subject to rates.
Environmental Services & Resources 3 Neutral •Onshoring an ongoing opportunity for environmental consultants. •Researching beneficiaries of onshoring/infra buildout.
•Mixed impact from roll back/replacement of Federal regulations.
Energy Management & Efficiency 22 Positive •"Pro-growth" policies support Industrial and Construction exposure. •Maintain significant exposure
•Further grid investment likely to support AI(6) development.
Water Infrastructure & Technologies 15 Positive •Tailwinds industrial reshoring and increased construction. •Adding to existing exposure.
•Likely acceleration of water utility M&A on de-regulation.
Resource Efficiency & Waste Management 21 Positive •Accelerating economic growth positive for general waste volumes. •Recently added new waste holding.
•Increased onshoring and oil/gas activity positive for hazardous waste. •Maintaining existing waste and equipment exposure.
•Tailwinds for equipment rental names from economic growth.
Digital Infrastructure 14 Positive •Onshoring positive for industrial software holdings. •Continued research into further holdings.
•Neutral impact on data centres and AI.
Donald Trump has been a vocal critic of renewables, and the alternative energy
sector sold off sharply following his victory. While not our base case, there
is now incremental risk to both the Investment and Production Tax Credits
("ITC" & "PTC"), as well as less enthusiasm for offshore wind. However,
PE(7) multiples across the sector had already contracted, both anticipating a
Trump win and reflecting higher interest rates. At 7.0% of the portfolio,(8)
the investment managers reduced IEM's already low wind and solar exposure, in
favour of consolidated positions in independent power producers ("IPPs")
trading below operating asset values.
Beyond alternative energy, the takeaways across Environmental Markets, and the
IEM portfolio, are more mixed. Trump is expected to prioritise domestic
economic growth and to continue Biden's policy of reshoring manufacturing.
This would be favourable for names exposed to construction and industry across
energy management and water infrastructure.
In addition, stocks in resource efficiency & waste management are likely
to be net beneficiaries. A US pivot towards more conventional energy would
also generate high value waste streams for hazardous waste holding Clean
Harbors, and could provide further tailwinds for equipment rental names, as
well as the portfolio's industrial software names in digital infrastructure.
The new administration's priorities are less clear-cut across the areas of
Transport Solutions, Sustainable Food & Agriculture, and Environmental
Services & Resources. For example, EV4 tax credits may be at risk but any
fallout could well be balanced by Elon Musk's influence over government
policy. In Sustainable Food & Agriculture, the negative impact of tariffs
has to be weighed against the likely tailwinds for Natural Ingredients
companies of Robert Kennedy's stance on food processing. Similarly, the
potential repeal of federal regulations in favour of state-level decrees
creates opportunities for environmental consultancies able to navigate them.
Ultimately, the structural trends which underpin IEM's core investment thesis
will not change over the course of Trump's presidency. Indeed, policies which
do not address or even exacerbate environmental issues will eventually lead to
greater demand for adaptation solutions, be they a more resilient electrical
grid, greater storm drainage or cooling solutions. Similarly, governments have
little influence over the very real economic incentives driving the uptake of
more efficient technologies by businesses and consumers. The investment
managers are continuously searching for additional investment opportunities
which harness these growth drivers.
Recovery of Disrupted Supply Chains
While the COVID-19 pandemic now feels like a distant memory, global patterns
of supply and demand are only now normalising after the unprecedented
disruption. Companies which built up inventory levels during the pandemic have
had to work through them as demand stabilised, or in some cases weakened. The
consequence of this for the suppliers however, is that demand meaningfully
decreased.
There are now positive signs that this protracted process is coming to an end
and the opportunity is becoming more clear. In Natural Ingredients, companies
like DSM-Firmenich and Croda are reporting a return to demand growth across
most of their key markets. In Life Sciences, bioprocessing companies like
Repligen are seeing sustained strength across large pharma and Contract
Development and Manufacturing Organizations ("CDMOs"). In Industrials,
UK-listed DiscoverIE rallied sharply towards the end of the year as the maker
of specialised industrial components reported similarly strong numbers.
These holdings demonstrate the tremendous recovery of potential holdings when
market dynamics change. At the same time, these organisations have been
improving their operational efficiency, emerging leaner and more profitable at
the other end.
1 Production Tax Credit.
2 Investment Tax Credit.
3 Independent Power Producer.
4 Electric Vehicle.
5 Robert F Kennedy.
6 Artificial Intelligence.
7 Price to next 12-month earnings per share.
8 As at 31 December 2024.
Power Demand - Grids, AI and Nuclear
Global electricity demand is set to triple between now and 2050 thanks to a
combination of increasing electrification and higher economic growth in
developing economies.(1) In the latter, the switch away from fossil fuel
energy generation is likely to be most pronounced in the residential and
transportation sectors.(2) Electrifying industrial processes such as steel
production would increase this still further. In addition, the rise of AI
means that the International Energy Agency expects data centre energy
consumption will reach 1,000 TWh by 2026, roughly equivalent to the entire
energy consumption of Japan.(2) The arrival of the "Deepseek" AI technology in
the opening weeks of 2025 has challenged, but not changed, this thinking.
To cope with this, electricity grids need to expand. The introduction of
renewables and the growth of energy storage means they must also become more
flexible, with more interconnections to manage the intermittency of solar and
wind generation (the output of which can be more variable). Electricity
networks are also becoming bidirectional, as users start to both consume and
produce electricity. Yet grid investment has largely been static over the past
14 years, at around US$300 billion globally each year.(3) Consequently,
around two-fifths of Europe's grids are more than 40 years old. In the US, the
average age of a large power transformer is of a similar age, which is the end
of its typical lifespan.(3)
Aging cables, accelerating electricity demand and the needs relying on a more
intermittent supply mean systems are becoming increasingly fragile, with a
greater risk of blackouts.(4) To combat this, annual global investment in
electricity grids will need to rise commensurately, with annual spending of
some US$900 billion between now and 2050, plus an additional US$200 billion
directed towards expanding energy storage capacity. This long-term trend
underpins IEM's holding in electrical cable manufacturer Prysmian.
Aligned with these developments is the renewed interest in nuclear energy. Big
tech companies in particular have become high profile proponents, driven by
their need to support massive energy requirements while also meeting carbon
reduction commitments. Small modular reactors ("SMRs") in particular have
garnered significant interest, as they promise enhanced safety, efficiency and
scalability; although their current use is limited. Most tangibly, in
September Microsoft (not held) signed a deal to reopen Three Mile Island.(5)
We continue our search for other innovative portfolio additions in this space.
Mergers and Acquisitions ("M&A")
There is a long history of M&A in Environmental Markets. Large corporates
and private equity ("PE") are drawn to the structural growth potential that
these companies offer as IEM seeks to do. Activity typically picks up when
a sector is viewed as ripe for consolidation or valuations become
particularly attractive.
In the early 2000s, the water treatment and waste management sectors
experienced such episodes. The industrial conglomerate General Electric
purchased several water treatment companies including Ionics and Osmonics.(6)
UK-based PE company Terra Firma was similarly drawn to the waste sector's
strong and stable cashflows, purchasing Waste Recycling Group in 2003 and
Shanks in 2004, before combining and ultimately selling them on.(7)
In recent years there have been fewer takeovers in Environmental Markets.
Maturing companies have instead focused on consolidating existing business and
growing their own franchises. However, the combination of higher interest
rates, negative sentiment on sustainability oriented stocks and concentrated
performance in mega-cap tech has left many valuations well below their
historic averages. The effect is most pronounced in some of IEM's IPP
holdings, where companies like Boralex trade at 10x EV/EBITDA - a multiple
which discounts not only the pipeline, but existing operational assets. By
contrast, transactions for similar companies in the private markets - such as
Brookfield's acquisition of NEOEN - are taking place at multiples of c.17x
EV/EBITDA.(8)
This discrepancy is driving up M&A across sectors. Within the IEM
portfolio there have been three instances in 2024. As disclosed in the
half-yearly financial report, Greek IPP Terna Energy announced a takeover by
Masdar, an Abu Dhabi owned renewables developer. Most recently, in October the
simulation software company Altair Engineering announced an agreement to be
acquired by the German technology conglomerate Siemens (not held). At $113 per
share, the takeover represents a 19% premium to the undisturbed share
price.(9) The deal was unanimously approved by Altair's Board, and is expected
to close in the second half of 2025, following regulatory approval. As
Siemens' second biggest acquisition ever,(10) the transaction reflects the
transformational role data analysis, software and AI are having on the
industrial value chain.
1 Energy Transition Commission, 22 November 2023: Barriers
to Clean Electrification - Grids: the critical gap, presentation to
Commissioner meeting.
2 Executive summary - Electricity 2024 - Analysis - IEA.
3 Executive summary - Electricity Grids and Secure Energy
Transitions - Analysis - IEA.
4 North American Electric Reliability Corporation,
December 2023.
5 Three Mile Island nuclear site to reopen in Microsoft
deal - BBC News.
6 GE Infrastructure Completes Acquisition of Ionics, Inc.
| GE News; GE Power Systems to Acquire Osmonics, aLeader in Water Purification
and Filtration; New Unit to Become Partof GE Water | GE News.
7 Terra Firma sells waste business for £1.4bn
(infrastructureinvestor.com).
8 Brookfield to acquire Neoen for €6.1 billion -
Energy-Storage.News.
9 Siemens strengthens leadership in industrial software
and AI with acquisition of Altair Engineering | Press | Company | Siemens.
10 Siemens' $10.6 billion Altair deal strengthens its
industrial software offering | Reuters.
Absolute Performance Contributors and Detractors
The Company's net asset value ("NAV") delivered absolute returns of -0.4% in
2024. Global equity markets, as measured by the MSCI All Country World Index
("MSCI ACWI"), delivered 19.6% over the same period.
The primary driver of IEM's performance lag relative to the MSCI ACWI were
stocks which - due to the Manager's 50% Environmental Markets revenue
requirement - fall outside of the investable universe. The portfolio has
remained true to label and this is not at odds with IEM's investment thesis,
which is long-term in nature. Rather it reflects that amid economic
uncertainty, high interest rates and geopolitical tensions, investors have
continued to take shelter in mega-cap stocks where mass enthusiasm for AI
underpins investor momentum.
In 2024, over 50% of the MSCI ACWI's returns came from just 10 stocks. As well
as the so-called Magnificent Seven, these included semiconductor companies
Broadcom and TSMC, and online streaming platform Netflix. While their earnings
growth has doubtless been robust, a significant part of performance has been
driven by multiple appreciation. Even so, this was not sustained uniformly
throughout the year, with a sharp - albeit temporary - rotation in Q3 towards
mid and small-caps, illustrating the speed at which high momentum dynamics can
reverse.
Higher for longer interest rates also drove the outperformance of Financials
in 2024. Despite increasing initiatives around environmental finance, most of
the sector falls outside IEM's investable universe on revenue grounds. The
prospect of Donald Trump's re-election further boosted Financials given his
"pro-growth" stance. Investors anticipated inflationary tariffs, looser fiscal
policy and a lengthy period of higher interest rates. The new regime's
permissive stance on M&A is also viewed as a boost for dealmaking
investment banks, as well as increasing the likelihood of regional US bank
consolidation.
Relative Performance Analysis
Performance relative to MSCI ACWI 12 Months ended
31 December 2024
%
NAV total return (0.4)
MSCI ACWI total return 19.6
Relative performance (20.0)
Analysis of relative performance:
Portfolio total return (0.5)
MSCI ACWI total return 19.6
Portfolio underperformance (20.1)
Borrowing:
Gearing effect (0.1)
Finance costs (0.4)
Management fee (0.8)
Other expenses (0.1)
Trading Costs (0.2)
Share transactions:
Buybacks 1.9
Tax (0.2)
Total relative NAV performance (20.0)
Performance relative to FTSE ET100 12 Months ended
31 December 2024
%
NAV total return (0.4)
FTSE ET100 total return 16.8
Relative performance (17.2)
Analysis of relative performance:
Portfolio total return (0.5)
FTSE ET100 total return 16.8
Portfolio underperformance (17.3)
Borrowing:
Gearing effect (0.1)
Finance costs (0.4)
Management fee (0.8)
Other expenses (0.1)
Trading Costs (0.2)
Share transactions:
Buybacks 1.9
Tax (0.2)
Total relative NAV performance (17.2)
Positive contributions to performance were broadly spread across IEM's
portfolio. In addition to several acquisitions (see Key Developments and
Drivers) many companies delivered consistently strong returns over the year,
such as Clean Harbors - a US industrial waste specialist, CATL - a Chinese
battery producer, and Brambles - an Australian pallet and logistics company.
Despite all being categorised as 'Industrials', the companies have highly
differentiated business models, sources of revenue and geographical exposure.
Furthermore, where CATL was added to the portfolio early this year due to a
compelling valuation opportunity given its competitive advantage, Clean
Harbors is a long-term holding which continues to demonstrate how quality
management can drive up earnings by capitalising on captive demand, structural
growth and ever-tighter regulation.
One specific area of strength within the portfolio was companies with exposure
to construction, particularly in the US. These delivered positive returns in
2023 and continued to do so in 2024. At a headline level, high interest rates
have done little to weaken residential demand, while infrastructure investment
and commercial spending continues apace.
Exemplifying these trends are two of IEM's top contributors for the year:
Pentair and Lennox International, a producer of water flow technology and
HVAC1 solutions, respectively. Pentair steadily drove margins up over the
year, with growing sales from its Pool division and further synergies from its
Manitowoc Ice acquisition. Lennox delivered a series of "beat and raise"
earnings updates, citing market share gain and sales growth within its
commercial business. While the long-term investment cases for these, and IEM's
other construction holdings, remain intact, we have managed the position by
taking profits, bearing in mind the industry's cyclical nature.
IEM's Digital Infrastructure stocks also boosted performance. With a shared
focus on operational efficiency, and consequently environmental performance,
its customers have continued to invest in solutions which boost their bottom
line. Within this segment, software companies include the likes of
transportation management platform Descartes and design and simulation
specialist PTC, whose dominance of a niche and subscription-based revenues
enable steady growth. By comparison, Trimble - a producer of geolocation
software and equipment - rallied substantially after repeated engagement and
an activist shareholder produced a strategic update and earnings upgrades.
In hardware, the strongest contribution has come from Monolithic Power Systems
a producer of thermally efficient power semiconductors. The shares performed
strongly thanks to sustained growth in data centres, where Monolithic is sole
supplier to Nvidia (not held). Concerns this relationship could be at risk
prompted a pullback in the shares towards the end of the year but appear
overdone. Management has long trailed Nvidia's desire for another supplier and
has factored this into guidance. Equally, growth is returning to Monolithic's
other business segments which have experienced temporary weakness, such as
autos, consumer electronics and industrials.
Lastly, the portfolio also benefited from its positions in companies related
to the energy grid. These include long-term holding Generac, as well as
Prysmian. The former, a maker of standby electrical generators, experienced
resurgent demand in its home standby division thanks to a particularly active
hurricane season and its continued penetration of US distributors. By
contrast, Prysmian - an Italian producer of electrical and fibre optic cables
- is at the centre of long-term investment in grid infrastructure. At the time
of its purchase in October 2023, the investment managers also saw evidence of
a business turnaround at an attractive valuation. This thesis has played out
rapidly in 2024, with the acquisition of US company Encore Wire helping
management to boost margins, deliver cash flow, and deleverage the balance
sheet.
The bulk of IEM's negative returns came from holdings in a handful of sectors
with compelling long-term growth that have been experiencing temporary
headwinds. The portfolio's renewables holdings account for the largest of
these. Excepting Terna Energy which was taken over (see Developments and
Drivers), averaged out across the full year this 8.6% allocation spans four
IPPs, two solar positions and a manufacturer of wind turbines. From a
sentiment perspective, sustained higher interest rates and Donald Trump's
re-election weighed on the P/E multiples of all seven companies.
IPPs were further impacted by low European power prices, themselves driven by
soft industrial production and plentiful US gas. Yet here the investment
managers are seeing consistent evidence of new long-dated contracts being
priced at higher rates with inflation protection, particularly where the
source of demand is Big Tech. At the same time, holdings such as Northland
Power are navigating medium-term uncertainty by focusing on project execution
and cash generation, while companies like Ormat Technologies continue to
receive vocal support for their geothermal energy and battery storage
solutions. This is creating a range of attractive valuation opportunities
across the space.
In wind and solar, there were more fundamental issues. In solar, sustained
weak demand combined with poor capital discipline from Chinese producers
resulted in weak performance and ultimately a loss of conviction for both
SolarEdge Technologies and Xinyi Solar. The latter had also rallied
meaningfully following Chinese stimulus. Similarly, Vestas, a maker of wind
turbines, reported successive results with disappointing margins. These were
driven by accounting adjustments from its services division, historically seen
as a superior quality business relative to peers. With lingering questions
about margin recovery, increased Chinese competition and management quality,
the managers exited the position.
Conversely, the trajectory of IEM's Life Sciences companies provided an almost
exact mirror image. Repligen, a maker of products and solutions for the
bioprocessing industry, entered the year assuming continued sales weakness
would prevent it being able to raise prices. Yet by Q3, more supportive
demand, combined with product differentiation and a push into more commercial
customers, enabled the company to boost its operating margin by 1%.
Shares in Spirax Group, a supplier of specialised industrial heat solutions,
also inflected towards year end. Sustained weakness in Watson Marlow - its
peristaltic pump division with significant bioprocessing exposure - had been
compounded by softer industrial demand, particularly in China. Here too
though, a November trading update indicated a return to growth despite these
challenges.
Industrial production remains weak globally, and companies which experienced
super-normal demand during COVID have faced lengthy inventory destocking
periods. While some of these are now normalising, holdings with weak cyclical
end markets accounted for the second largest source of negative returns. These
include manufacturers of electrical components such as Littelfuse (a maker of
circuit protection), LEM (maker of transducers) and DiscoverIE (a specialist
industrial manufacturer). Amid weaker demand for their products, these
companies have been active in cutting costs to protect margins. More
optimistic forward guidance in Q4, notably from DiscoverIE, provided a late
boost to the shares, demonstrating their recovery potential when market
dynamics change.
Portfolio Positioning and Activity
As at 31 December 2024, the Company holds a diversified portfolio of 60 listed
companies. Since the half-yearly financial report was published, the
investment managers have focused on upscaling the weight of its top ten
holdings, consolidating into high conviction positions and exiting sub-scale
positions with limited near-term visibility. Doing so has proved beneficial,
with a 22.6% turnover over the full year making a 1.1% positive contribution
to performance.
New holdings Holdings sold(1)
Bentley Systems Inc Dialight
Boralex Inc Cryoport
Cognex Corp Eurofins Scientific
CATL Indraprastha Gas
nVent Electric Plc Shimano Inc
Waste Connections Inc SolarEdge Technologies
Xylem Inc Stericycle Inc
Terna Energy
Vestas Wind Systems
Xinyi Solar Holdings
Badger Meter
1 Holdings fully disposed of.
In general, the investment managers aim to strike a balanced weighting
between cyclicals and defensives, even if the nature of IEM's investable
universe skews towards the former. Since the half-yearly financial report, the
weight in defensives has moderately increased. Rather than any concerted macro
call, the move reflects an ability to source ideas from across Impax's
platform of analysts and investment managers. Given attractive valuations
across Environmental Markets, many of these are stable businesses harnessing
long-term growth which typically trade at a premium but are currently
presenting opportunities to initiate.
The first group of transactions were related by virtue of the investment
managers' valuation discipline. In July, IEM exited its position in Shimano.
Shares in the Japanese maker of bicycle components had risen sharply,
presenting limited medium-term upside. This calculus was partly informed by a
product malfunction and allegations of forced labour at a company supplier.
Taken together, this presented an unfavourable combination of risk and reward.
Valuation discipline also informed the exit of water meter company Badger
Meter. Badger was held in IEM's portfolio for over two decades, delivering
consistently strong contributions to performance. However, its valuation
reached a point where the investment managers saw little further upside. The
proceeds were used to initiate a position in Xylem, a water infrastructure
provider with some product overlap. Shares in Xylem weakened sharply after
Q3 results, trading at circa 40% below its peak multiple set in 2021. This
created an entry point in a company which continues to expect stable revenue
growth and robust cash flows.
Longer than expected inventory destocking has weighed on industrial stocks
like Dialight, a lighting specialist, as well as IEM's bioprocessing
companies. In addition, conversations with the management of Cryoport raised
concerns around capital allocation. As a result, the investment managers sold
the position in favour of existing holding Repligen, a company focused on
bioprocessing equipment and solutions. The Manager exited its position in
Indraprastha Gas, an Indian provider of natural gas. Regulatory changes are
increasingly pushing for electrification of IPG's key transportation
end-market, fundamentally changing the investment thesis.
Further consolidation took place across IEM's renewables holdings. This
consisted of selling holdings where lower than expected business quality has
added to the pressure of sustained high interest rates and soft power prices.
Proceeds were reallocated to IPPs which, similar to when Contemporary Amperex
Technology ("CATL") was purchased in February, traded on low valuations
relative to history and were not reliant on US growth for their investment
case. Thus Vestas Wind Systems (a wind turbine manufacturer), Xinyi Solar
(a maker of solar glass) and SolarEdge Technologies (a producer of solar
optimisers) were sold to initiate a position in Boralex. Shares in the
latter, a Canadian-listed IPP, pulled back in the wake of Donald Trump's
election in November, despite the US accounting for a relatively small
amount of its 6.4GW pipeline, which is spread across Canada, France and the
Northeastern US.
The Manager sold its position in Eurofins Scientific, an environmental testing
company listed in France. Due to a changing business mix, company revenues
fell below Impax's 50% environmental markets revenue threshold.
The Manager's third series of transactions focused on increasing IEM's
exposure to digital infrastructure. Having purchased Cognex, a maker of
machine vision systems in the first half of the year, the investment managers
initiated a position in Bentley Systems. They are a provider of software for
the planning, construction, and maintenance of infrastructure. The company's
relatively low cost to clients and subscription-based business model ensures a
high level of retention, with construction one of the sectors least penetrated
by software adoption.
Separately, nVent Electric, a provider of electrical products and solutions,
was bought. Following the disposal of its Thermal Management business, the
company is split 60/40 between two divisions: Enclosures, and Electrical &
Fastening Solutions. The former provides storage and cooling products for data
centres, where the latter connects electrical components in buildings. With
strong market leadership across several niche segments, nVent has a track
record of delivering robust margins. The shares traded well below peers and in
line with broader industrials at the time of purchase.
Finally, the investment managers also made several changes to the portfolio
following strong share price rallies driven by M&A. While the proceeds of
Terna Energy's disposal were reallocated across the portfolio, profits from
Stericycle were used to initiate a position in Waste Connections. This is a
US-based solid waste disposal and recycling company that has also moved into
renewable natural gas. By targeting markets where it enjoys exclusivity or
minimal competition. It benefits from high route density, low capex needs and
long-lasting contracts. It targets a defensive growth model through a
combination of pricing and asset acquisition. As a result, the stock trades at
a justified premium to peers.
Valuation, Growth and Gearing
Over the course of 2024, IEM's portfolio occupied a relatively narrow
valuation range as measured by its next 12 months' (or forward)
price-to-earnings ("PE") ratio. Indeed, having started the year at 20.7x, the
portfolio ended on 20.2x. This is only slightly above IEM's historical
ten-year average, despite IEM having steadily increased its holdings in more
highly valued sectors such as Technology and Health Care. The investment
manager's view this as evidence that not only are global equity markets
pricing in sentiment headwinds across overtly "sustainable" companies, but
that markets also continue to overly discount smaller companies relative to
their larger peers.
Sector headwinds notwithstanding, over the past ten years the portfolio's
implied annualised earnings growth (or estimated future growth rate) of 4.9%
is ahead of the MSCI ACWI's 4.2%. However, the portfolio's tilt towards
pro-cyclical, mid and small-cap stocks means that when macroeconomic
conditions place these segments of the market out of favour, short-term
relative returns can be impacted. This is reflected in the sharp contraction
of IEM's P/E multiple over the year, even as that of the MSCI ACWI has
expanded. While the fundamental performance of IEM's holdings has been robust,
this has not been rewarded by broader equity markets.
While past performance does not predict future returns and forecasts are not
always certain, the bar chart in the Annual Report shows the potential
earnings growth (green bars) of the companies in which IEM is invested over
the next 10 years, as suggested by movements in share prices of those
companies.(1) This in turn suggests that IEM has a higher potential upside
following the recent strong performance of the MSCI ACWI.
Further proof of this can be seen in the relative premium at which the
portfolio trades relative to the MSCI ACWI. The forward PE for this index rose
steadily over the course of the year, reaching 17.9x by December. As a result,
IEM's valuation premium has steadily declined to 13.3% by the end of 2024,
even as forward earnings growth remains meaningfully higher than the broader
market. With shares in IEM trading at a further discount, the investment
managers believe this makes a compelling offering for prospective
shareholders, as well as those looking to increase existing positions.
Since the most recent renewal of the Company's borrowings (as referenced in
the Chairman's Statement), gearing has been a modest 0.16% detractor from
performance but has enabled the portfolio to more fully participate in the
breadth of opportunities across Environmental Markets as a whole, with the
potential upside to come. Overall, the investment managers remain comfortable
operating within a gearing framework of up to 10% of net assets.
1 This is derived from a "log return" refers to a method
of calculating the percentage change in an asset's value over a period of time
by taking the natural logarithm of the ratio between its current price and its
previous price, essentially representing a continuously compounded rate of
return, where the compounding effect is fully accounted for; this makes it a
more accurate measure compared to simple returns when analysing price changes
over time.
Outlook
There has been a clear shift in the market narrative. Performance has
broadened beyond a narrow group of mega-cap technology stocks. US
exceptionalism has given way to stronger performance for Europe and China.
Notably, shares in electric vehicle manufacturer Tesla - the only "Magnificent
Seven" stock which falls within IEM's investable universe - have fallen more
than 40%. The move reflects some of the investment managers' concerns about
valuation and governance risk, which drove their decision not to invest. At
the time of writing, this is favourable to IEM's portfolio, which is
overweight Europe, has 99% active share and holds many attractively valued
stocks recovering from cyclical headwinds. Current volatility is also creating
opportunities for active managers to initiate positions in companies
harnessing long-term structural trends.
Artificial Intelligence remains a powerful force that will shape many
industries. However, some companies delivering that change are spending
hundreds of billions to do so, without the earnings growth to justify it.
Elevated valuations, and the prospect of falling interest rates, means
investors are tactically reallocating to cheaper areas of the market with
comparable earnings potential.
US economic confidence is weakening. Donald Trump's willingness to deploy
tariffs for geopolitical, as well as economic ends is driving up consumer and
manufacturing uncertainty. As a result, Conference Board indicators are
falling to recessionary levels(1), PMIs are pulling back(2) and growth
expectations are weakening. The outlook for tariffs and trade wars remains
volatile and uncertain. We remain in close contact with portfolio holdings on
plans and scenarios to navigate this uncertain period but - like them - are
avoiding knee jerk reactions until more clarity emerges.
Conversely, European stocks are benefiting from multiple tailwinds. Valuations
were and remain more attractive, with Europe's Stoxx 600 trading at 14.2x
forward price to earnings (PE) at the start of the year, compared to the
S&P 500's 24.0x. Inflation in the EU is at 2.4%, trending downwards, and
the ECB has cut interest rates twice.(3) A possible end to the Russian/Ukraine
war may also lower energy prices and instigate a c.$486 billion rebuilding
programme.(4) Lastly, US isolationism has galvanised European political
action, with Germany advocating a 500bn EUR infrastructure fund (of which 20%
will likely be allocated to Environmental Markets), looser state debt rules
and a 150bn EUR EU-wide rearmament package. These actions have potential to
accelerate economic growth in the EU, where IEM is c.18% overweight vs MSCI
ACWI.
The events of 2025 so far this year are testament to the limited value of
macroeconomic prognostication. Within IEM, the investment managers focus on
purchasing well-run companies, harnessing structural trends driven by economic
need, at reasonable valuations. Long-term themes such as electrification,
digitalisation and adaptation to climate change are transitions which cut
across sectors and will continue regardless of which political party is in
office. This is a compelling time to be invested in an investment trust that
is highly differentiated from concentrated global equity indices and continues
to trade at a c.10% discount to NAV.
Investment Managers
Jon Forster
Fotis Chatzimichalakis
Bruce Jenkyn-Jones
2 April 2025
1 US Consumer Confidence.
2 February 2025 Manufacturing ISM® Report On Business®.
3 Source: Bloomberg as at 11 March 2025.
4 Pricing Ukrainian Reconstruction | German Marshall Fund of
the United States.
Principal risks and uncertainties
The Board is responsible for the management of risks faced by the Company and,
through delegation to the Audit Committee, has established procedures to
manage risk, oversee the internal control framework and determine the nature
and extent of the principal risks the Company is willing to take in order to
achieve its long-term strategic objectives. The Audit Committee carries out,
at least annually, a robust assessment of the principal risks and
uncertainties and reviews ongoing monitoring of both controls risks and
controls. This ensures heightened and emerging risks are identified outside of
the normal cycle of Board and Audit Committee meetings.
Risks are documented on a risk register, grouped into four main categories:
Strategic and Business Objective Risks; Investment Management Risks;
Operations - Service Providers Risks; and Compliance, Regulatory and Corporate
Governance Risks. Risks are then rated before and after mitigating controls by
impact and likelihood of occurrence, with the assessed ratings charted on risk
matrices. The risk register is reviewed on an ongoing basis in an attempt to
capture all risks and to ensure appropriate mitigation is in place. Reviews
take into account changing factors including, but not restricted to, changes
to markets (both macro and micro), stakeholders, operations, regulation and
emerging risks.
The top risks identified by this process are set out in the following section,
and the Board considers these to be the principal risks of the Company.
The Board considered both global economic and geo-political risks, and those
arising from armed conflicts amongst other risks. Updates on market impact and
operational resilience were received from the Manager, Administrator and other
key service providers. The Board is satisfied that the key service providers
had, and continue to have, the ability to continue their operations
efficiently, including in a remote or virtual working environment.
The Manager continues to provide regular updates to the Board on the financial
impacts on the portfolio performance and investee companies, as well as the
long-term effects and opportunities for the sectors in which the Company
invests.
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.
The experience and knowledge of the Directors is invaluable in consideration
of emerging risks, as are update papers and advice received from the Board's
key service providers such as the Company's Manager, broker, company secretary
and auditor. The AIC also provides regular updates and draws members'
attention to forthcoming industry and/or regulatory issues.
Potential risk Mitigation Trend
Strategic and business objective risks
Economic and market risks
Price movements of the Company's investments are highly correlated to the There are inherent risks involved in stock selection. The Manager is Neutral
performance of global equities in general and small and mid-cap equities in experienced and employs its expertise in selecting the stocks in which the
particular. Falls in stock markets are likely to adversely affect the Company invests. The Manager spreads the investment risk over a wide portfolio
performance of the Company's investments. of investments in its three main sectors: energy, water and waste, as well as
geographically.
The changing world order increases uncertainty. Changes in general economic
and market conditions, such as currency exchange rates, interest rates, rates At year end, the Company held investments in 60 companies and the largest
of inflation, industry conditions, tax laws, political events and trends can holding represented 3.2% of net assets.
substantially and adversely affect the value of investments. Market risk
includes the potential impact of events which are outside the Company's The Manager will not normally hedge against foreign currency movements, but
control, such as the ongoing wars in the Middle East and in the Ukraine. the Manager takes account of the risk when making investment decisions.
Further details on financial risks and risk mitigation are disclosed in note
The Company holds a significant part of its portfolio in companies with small 16 to the accounts.
market capitalisations, which are likely to be subject to higher valuation
uncertainties and liquidity risks than larger capitalisation securities. The The high risk rating remains unchanged; this reflects continued uncertainty in
Company may also invest in unquoted securities which generally have greater markets, though for changed reasons. Interest rates have stabilised and
valuation uncertainties and liquidity risks than securities listed or traded inflation reduced but geo-political uncertainty continues to remain high.
on a regulated market
The Company's objective and strategy do not continue to attract investors Increasing
This risk includes, but is not limited to, the risk that the Company's The Company invests in a broad portfolio of investments which are spread
anticipated growth of financial returns from environmental markets does not amongst several environmental market sectors. The Manager has a rigorous
occur, that the environmental thematic decreases in relevance and that there investment process which takes into account relevant factors prior to
is reversal of environmental policy. Companies operating in environmental investment decisions taking place and thereafter. As well as reviews of the
markets carry risks that governments may alter the regulatory and financial portfolio and relevant industry matters at quarterly Board meetings, the Board
support for environmental improvement, costs of technology may not fall, has an annual strategy day at which the overall strategy of the Company is
capital spending by their customers is reduced or deferred and their products discussed.
or services are not adopted.
All shareholders have an opportunity to talk with the Board and the Manager at
There is the risk that even though the Company's objective and strategy the AGM and can communicate with the Board at any time by writing to the
continues to be attractive to investors, a significant minority shareholder, Company's registered address or by email (details are within the Annual
whose interests are not aligned with the interests of other shareholders, Report).
could threaten the Company's long-term objectives.
Share price trades at excessive discount to net asset value
It is in the long-term interests of shareholders that shares do not trade at a The Board monitors the level of premium/discount and receives regular Increasing
significant discount to net asset value. shareholder feedback from the Company's Manager and broker.
Investor demand for the Company's shares may fall, causing the discount to The Board has the power, granted by shareholders, to buy back shares when in
widen. the best interests of the Company, and this should reduce supply of shares and
thus reduce or stop widening of the discount and may reduce volatility. The
A wide discount can cause the shares of the Company to become attractive to power taken at the AGM is for a maximum of 14.99% of shares to be bought back.
activist shareholders, who may have a short term agenda which is not in the However, the Board has the option (which it exercised subsequent to the year
interests of all shareholders. end) to ask shareholders to authorise an additional number of shares be bought
back.
The risk rating was increased to reflect the widening of the discount; this
occurring even though the Company bought back 14.7% of its share capital
during the year.
Continuation vote risk
The risk that the continuation vote fails to be passed by shareholders. The Board, the Company's broker and the Manager engage with major shareholders Increasing
Additionally, that the vote is passed but there is a major vote against, on an ongoing basis. All shareholders have an opportunity to talk with the
potentially indicating that a significant minority of shareholders are Board and the Manager at the AGM, and to submit questions to the Board
dissatisfied with the Company. throughout the year by writing to the Company's registered address or by email
(details are within the Annual Report). The risk rating was increased to
The risk that if the Company had a significant minority shareholder, this reflect this year's tri-annual vote.
shareholder's vote could disproportionately affect the outcome of the vote if
shareholder voting numbers were to be low. The Board seeks to ensure all shareholders, including those whose shares are
held indirectly on platforms, are informed of the upcoming AGM and of their
opportunity to vote. For platform shareholders, specific guidance on how to
vote will be advised and the availability of general guidance on the AIC
website has been highlighted in the Chairman's Statement and the separate
Circular and notice of AGM.
Investment Management
Underperformance of the Investment Manager
Consistent long-term underperformance by the investment manager may lead to At each board meeting the investment manager reports on the performance of the Increasing
poor performance of the Company compared to its benchmark comparators and Company including comparisons to its peers and benchmark comparators.
peers, a widening of discount to NAV, a reduction in capital and dissatisfied
shareholders. The Board considers various portfolio metrics including top contributors and
detractors to performance, sub-sector and regional performance, investment
rationale, valuation and growth statistics, key activity in the period,
attribution analysis, portfolio positioning and risk, and the Manager's
outlook. The Board considers the rationale behind new additions, for which the
Manager provides details including the environmental benefit. The Board also
considers the macro and geopolitical risks and uncertainties that effect the
portfolio and the Company. The Board considers the investment process to
ensure this is aligned to the Company's investment objective and policy. The
Board considers the capabilities of the Manager, the viability of the
Manager's business model and the ongoing investment in resources.
The risk rating increased as the likelihood of long-term underperformance
increased following a third year of underperformance.
Operations - service providers risks
Failure or breach of Information Technology (IT) - including cyber-security,
and physical security risks
Neutral
Failure of IT or physical security could potentially lead to breaches of
confidentiality, data records being compromised and the inability to make The Company's key service providers report periodically to the Board on their
investment decisions. In addition, unauthorised physical access to buildings procedures to mitigate cyber security risks including their alignment with
could lead to damage or loss of equipment. industry standards, their physical and data security procedures and their
business continuity planning.
The underlying risks primarily exist in the third party service providers to
whom the Company has outsourced its depositary, registration, administration The Board meets with its key service providers at each Board meeting and
and investment management activities. Directors often engage with service providers intraboard.
Operational risk
The Board has contractually delegated to third party service providers the Due diligence is undertaken before contracts are entered into with third party Increasing
management of the investment portfolio, and services covering: depositary and service providers, taking into account the quality and cost of services
custody; registrar; company secretarial and fund accounting. The security of offered, including policies and procedures, and risk management and controls
the Company's assets, dealing procedures, accounting records and adherence to systems in operation in so far as they are relevant to the Company.
regulatory and legal requirements depend on the effective operation of the Thereafter, the performance of the provider is subject to regular review and
systems of these third party service providers. report to the Board. The Board monitors key persons as part of this oversight.
Failure by any service provider to carry out its obligations to the Company The control of risks related to the Company's business areas is described in
could have a material adverse effect on the Company's performance. Disruption detail in the corporate governance report within the Annual Report.
to the accounting, payment systems or custody records (including cyber
security risk) could prevent the accurate reporting and monitoring of the The risk rating was increased due to organisational and personnel changes at
Company's financial position. Apex, the Company's company secretarial and administrative service provider.
Whilst not being identified as principal risks after mitigation controls are
applied, other relevant risks to the Company include the following:
Potential risk Mitigation Trend
Strategic and business objective risks
Financing risk
The Company may borrow money for investment purposes. If investment markets The Board has authorised the Manager to use its discretion to utilise gearing Neutral
fall in value, any borrowing will enhance the level of loss. up to 10% of net assets. Any borrowing above this level requires Board
approval.
Capacity constraints on the availability of desirable companies for investment
may mean the Company is unable to achieve the level of gearing wanted. Borrowing facilities are renewed on a cost effective and timely basis.
The Manager keeps under regular review the opportunities for enhancing returns
by the prudent use of gearing.
The risk rating decreased following the successful refinancing of the
Company's revolving credit facility.
Global pandemic risk
The rapid spread of infectious disease may cause governments to implement The Manager spreads the investment risk over a wide portfolio of investments. Neutral
policies to restrict the gathering, interaction or movement of people and take Risk analysis includes scenario analysis of possible negative market events.
other measures as deemed appropriate to prevent its spread, causing disruption
to markets generally, investee companies, the operations of the Company and The Company's key service providers report periodically to the Board on their
its key service providers business continuity plans and procedures. The Board monitors the adequacy of
controls in place at the key service providers and their planned response to
an extended period of disruption, to ensure that the impact to the Company is
limited.
During times of elevated volatility and market stress, the Company's
closed-end fund structure protects it from the liquidity requirements that can
arise for open-ended funds.
Physical climate change risk
While efforts to mitigate climate change continue, the physical impacts are Physical climate change risk is still an emerging topic for investors as well Neutral
already emerging in the form of changing weather patterns. Extreme weather as for the management teams of investee companies. It has been a focus area of
events can result in flooding, drought, fires and storm damage, potentially research and engagement by the Manager to identify companies particularly
impairing the operations of an investee company at a certain location, or exposed to this risk and to open a dialogue with them on management options.
impacting locations of companies within their supply chain. Details of engagement with investee companies are given within the Annual
Report.
The Company invests in a broad portfolio of companies which are spread
geographically, limiting the impact of location specific weather events.
Investment management risks
Financial risks
The Company's investment activities expose it to a variety of financial risks The Manager does not actively hedge against foreign currency movements Neutral
which include foreign currency risk, portfolio liquidity risk and interest affecting the value of its investments, although the Manager takes account of
rate risk. this risk when making investment decisions.
The Company invests in securities and has borrowings which are not denominated Non-sterling borrowings will effectively hedge non-sterling investments for
or quoted in sterling. Movements of exchange rates between sterling and other matching currencies.
currencies in which the Company's investments are denominated may have an
unfavourable effect on the return on the investments made by the Company. The Company invests in range of global listed equities and the Manager
monitors the foreign currency exposure and liquidity of holdings within the
The Company's main exposure are its €60 million floating-rate Loan Notes portfolio and reports on these to the Board at each meeting.
and its £80 million revolving credit facility expiring in 2025, details of
which are shown in note 11. Interest rate risk on borrowing was reduced by fixing two of the Loan Notes.
Further details on financial risks and risk mitigation are disclosed in note
16 to the accounts.
Regulatory risks
Loss of investment trust status would lead to the Company being subject to tax The Company has contracted out relevant services to appropriately Neutral
on any gains on the disposal of its investments. qualified professionals, who monitor, and report to the Board on regulatory
compliance. In addition, the Company's broker, auditor, Company Secretary and
Breaches of the FCA's rules applicable to listed entities could result in Manager provide the Board with regulatory updates on a regular basis.
financial penalties or suspension of trading of the Company's shares. Breaches
of the Companies Act 2006 could result in financial penalties or legal The Manager reports on regulatory matters to the Board on a quarterly basis.
proceedings against the Company or its Directors. The assessment of regulatory risks forms part of the Board's risk assessment
programme.
Failure of the Manager to meet its regulatory obligations could have adverse
consequences on the Company.
Viability statement
The continuation of the Company is subject to the approval of shareholders
every three years, and approval was last given by shareholders at the
Company's 2022 AGM with 99.99% votes in favour of continuation of the Company.
The Board consulted with shareholders both during the year and subsequent to
the year end. Following this, and advise from the Board's brokers who have
also consulted with major shareholders, the Directors confirm that they have a
reasonable basis to believe that the resolution to continue will be passed by
shareholders at the forthcoming AGM on 20 May 2025. Details of the
continuation resolution is set out in the separate Circular and Notice of
Annual General Meeting.
The Directors have assessed the viability of the Company for the period to 31
December 2028 (the "Viability Period"). The Board believes that the Viability
Period, being approximately five years, is an appropriate time horizon over
which to assess the viability of the Company, particularly when taking into
account the long-term nature of the Company's investment strategy, the
principal risks outlined above and its gearing. The Board have also assumed
that shareholders will approve the continuation of the Company on each
continuation resolution proposed during the Viability Period. Based on this
assessment, the Directors have a reasonable expectation that the Company will
be able to continue to operate and to meet its liabilities as they fall due
over the Viability Period.
The Board reviewed the Company's income and expenditure projections and other
funding requirements in normal and worst case market conditions. The level of
the ongoing charges is dependent to a large extent on the level of net assets,
the most significant contributor being the investment management fee. The
Company's income from investments and cash from the sale of investments (which
are readily realisable) provide substantial cover to the Company's operating
expenses, and any other expenditure likely to be faced by the Company over the
Viability Period. Such expenditure includes buybacks of shares and repayment
of the Company's borrowings, which at the date of this report represented less
than 7.6% of the Company's investments.
In its assessment of the prospects of the Company, the Board considered each
of the principal risks and uncertainties, including the upcoming continuation
vote, and the liquidity and solvency of the Company.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare accounts for each financial
year. Under that law the Directors have elected to prepare the financial
statements in accordance with United Kingdom Generally Accepted Accounting
Practice, including FRS 102 'The Financial Reporting Standard applicable in
the UK and the Republic of Ireland'. Under company law the Directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company as at the end of the
year and of the net return for the year. In preparing these accounts, the
Directors are required to:
● select suitable accounting policies and then apply them
consistently;
● make judgements and estimates which are reasonable and
prudent; and
● state whether applicable accounting standards have been
followed, subject to any material departures disclosed and explained in the
accounts.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and which disclose
with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the accounts comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The accounts are published on the www.impaxenvironmentalmarkets.co.uk and
www.impaxam.com websites which are maintained by the Company's Manager, Impax
Asset Management (AIFM) Limited ("Impax"). The work carried out by the auditor
does not involve consideration of the maintenance and integrity of these
websites and, accordingly, the auditor accepts no responsibility for any
changes that have occurred to the accounts since being initially presented on
the website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors' confirmation statement
The Directors each confirm to the best of their knowledge that:
(a) the accounts, prepared in accordance with applicable accounting
standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
(b) this Annual Report includes a fair review of the development and
performance of the business and position of the Company, together with a
description of the principal risks and uncertainties that it faces.
Having taken advice from the Audit Committee, the Directors consider that the
Annual Report and financial statements taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to
assess the Company's position and performance, business model and strategy.
For and on behalf of the Board
Glen Suarez
Chairman
2 April 2025
Income Statement
Year ended Year ended
31 December 2024 31 December 2023
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments 2 - (26,676) (26,676) - 43,767 43,767
Net foreign exchange gains/(losses) - 4,056 4,056 - (464) (464)
Income 3 18,776 - 18,776 20,279 - 20,279
Investment management fee 4 (2,105) (6,315) (8,420) (2,320) (6,960) (9,280)
Other expenses 5 (1,351) - (1,351) (1,143) - (1,143)
Return on ordinary activities before
finance costs and taxation 15,320 (28,935) (13,615) 16,816 36,343 53,159
Finance costs 6 (1,183) (3,551) (4,734) (799) (2,395) (3,194)
Return on ordinary activities before taxation 14,137 (32,486) (18,349) 16,017 33,948 49,965
Taxation 7 (2,042) (255) (2,297) (1,601) 133 (1,468)
Return on ordinary activities after taxation 12,095 (32,741) (20,646) 14,416 34,081 48,497
Return per ordinary share 8 4.64p (12.56p) (7.92p) 4.86p 11.49p 16.35p
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 year.
Return on ordinary activities after taxation is also the total comprehensive
income for the year.
The notes form part of these financial statements.
Balance Sheet
As at As at
31 December 31 December
2024 2023
Notes £'000 £'000
Fixed assets
Investments at fair value through profit or loss 2 1,099,278 1,295,847
Current assets
Dividends receivable 1,763 586
Sales awaiting settlement 1,774 -
Taxation recoverable 52 39
Other debtors 427 166
Cash and cash equivalents 13,405 16,804
17,421 17,595
Creditors: amounts falling due within one year
Trade and other payables 10 (5,468) (3,821)
Revolving credit facility 11 (33,716) -
(39,184) (3,821)
Net current (liabilities)/assets (21,763) 13,774
Total assets less current liabilities 1,077,515 1,309,621
Creditors: amounts falling due after more than one year
Capital gains tax provision 7 (31) (40)
Loan Notes 11 (49,400) (51,785)
Revolving credit facility 11 - (35,312)
Net assets 1,028,084 1,222,484
Capital and reserves: equity
Share capital 12 30,562 30,562
Share premium account - 423,098
Capital redemption reserve 9,877 9,877
Share purchase reserve - 52,557
Special reserve 370,043 -
Capital reserve 603,177 691,454
Revenue reserve 14,425 14,936
Shareholders' funds 1,028,084 1,222,484
Net assets per ordinary share - debt at bookcost 13 428.62p 434.87p
Net assets per ordinary share - debt at fair value(1) 427.58p 434.34p
(1) This is an alternative performance measure.
Approved by the Board of Directors and authorised for issue on 2 April 2025
and signed on their behalf by:
Glen Suarez, Chairman
Impax Environmental Market plc incorporated in England with registered number
4348393.
The notes form part of these financial statements.
Statement of Changes in Equity
Share Capital Share
Share premium redemption purchase Special Capital Revenue
Year ended capital account reserve reserve reserve reserve reserve Total
31 December 2024 Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening equity as at 1 January 2024 30,562 423,098 9,877 52,557 - 691,454 14,936 1,222,484
Return for the year - - - - - (32,741) 12,095 (20,646)
Cancellation of share premium account* - (423,098) - - 423,098 - - -
Dividends paid 9 - - - - - - (12,606) (12,606)
Cost of share buybacks 12 - - - (52,557) (53,055) (55,536) - (161,148)
Closing equity as at 31 December 2024 30,562 - 9,877 - 370,043 603,177 14,425 1,028,804
* The new special reserve arose from the cancellation of the share premium
account during the year as explained in note 1(e) and in the Directors'
Report. It is distributable, unlike the share premium account.
Share Capital Share
Share premium redemption purchase Special Capital Revenue
Year ended capital account reserve reserve reserve reserve reserve Total
31 December 2023 Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening equity as at 1 January 2023 30,562 423,098 9,877 141,872 - 657,373 13,156 1,275,938
Return for the year - - - - - 34,081 14,416 48,497
Dividends paid 9 - - - - - - (12,636) (12,636)
Cost of share buybacks 12 - - - (89,315) - - - (89,315)
Closing equity as at 31 December 2023 30,562 423,098 9,877 52,557 - 691,454 14,936 1,222,484
The notes within the Annual Report form part of these financial statements.
Statement of Cash Flows
Year ended Year ended
31 December 31 December
2024 2023
Notes £'000 £'000
Operating activities
Return on ordinary activities before finance costs and taxation(1) (13,615) 53,159
Less: Tax deducted at source on income from investments (2,288) (1,597)
Foreign exchange (gains)/losses (4,178) (39)
Adjustment for losses/(gains) on investments 2 26,676 (43,767)
Special dividends received as capital 3,293 132
Scrip dividend received - (323)
Increase in other debtors (1,451) (81)
(Decrease)/increase in other creditors (165) 583
Net cash flow from operating activities 8,272 8,067
Investing activities
Sale of investments 421,201 478,935
Purchase of investments (256,375) (428,547)
Net cash flow from investing activities 164,826 50,388
Financing activities
Dividends paid 9 (12,606) (12,636)
Proceeds from Loan Notes and revolving credit facility - 86,099
Repayment of revolving credit facility and bank loan - (50,744)
Finance costs paid (4,593) (1,885)
Cost of share buybacks (159,420) (89,315)
Net cash outflow used in financing activities (176,619) (68,481)
Decrease in cash (3,521) (10,026)
Cash and cash equivalents at start of year 16,804 26,327
Effect of movements in exchange rates on cash held 122 503
Decrease in cash (3,521) (10,026)
Cash and cash equivalents at end of year 13,405 16,804
(1 ) Cash inflow includes dividend income received during the year ended 31
December 2024 of £15,070,000 (2023: £19,285,000) and bank interest of
£487,000 (2023: £646,000).
Changes in net debt
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Net debt at start of year (70,293) (25,279)
Decrease in cash and cash equivalents (3,521) (10,026)
The effect of changes in foreign exchange rates 4,103 367
Proceeds from Loan Notes and revolving credit facility - (86,099)
Repayment of revolving credit facility and bank loan - 50,744
Net debt at end of year (69,711) (70,293)
The notes form part of these financial statements.
Notes to the Financial Statements
1 Accounting policies
The Company is a public limited company incorporated in England and Wales with
registered number 4348393. Its registered office is as shown within the Annual
Report. The Company's shares are traded on the London Stock Exchange.
The Company is an investment company within the meaning of Section 833 of the
Companies Act 2006.
The accounts have been prepared in accordance with applicable UK accounting
standards. The particular accounting policies adopted are described below.
(a) Basis of accounting
The accounts are prepared in accordance with UK Generally Accepted Accounting
Practice ("UK GAAP") including FRS 102 'The Financial Reporting Standard
applicable in the UK and Republic of Ireland' and the Statement of Recommended
Practice 'Financial statements of investment trust companies and venture
capital trusts' ('SORP') issued by the Association of Investment Companies in
July 2022.
The accounts have been prepared on a going concern basis. Details of the
Directors assessment of the going concern status of the Company, which
considered the adequacy of the Company's resources and the macroeconomic
backdrop such as higher inflation and interest rates and possible recession,
are given within the Annual Report. This assessment also highlights the
Directors consideration of the shareholders' continuation vote at the
forthcoming AGM.
Amounts in the accounts have been rounded to the nearest £'000 unless
otherwise stated.
(b) Investments
Securities of companies quoted on regulated stock exchanges and any holdings
in unquoted companies have been 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 Income Statement as a capital item.
(c) Reporting currency
The accounts are presented in Sterling which is the Company's functional and
presentational currency and the currency in which the Company's share capital,
reserves and expenses are denominated as an UK registered and listed company.
(d) Income from investments
Investment income from shares is accounted for when the Company's right to
receive the income is established, which is usually considered to be the
ex-dividend date. Overseas income is grossed up at the appropriate rate of tax
but UK dividend income is not grossed up for tax credits.
Special dividends are assessed on their individual merits and may be credited
to the Income Statement as a capital item if considered to be closely linked
to reconstructions of the investee company or other capital transactions. The
ordinary element of scrip dividends received in lieu of cash dividends is
recognised as revenue. Any enhancement above the cash dividend is treated as
capital.
Scrip dividends received in lieu of cash dividends are recognised as revenue
except for any excess above the cash dividend, which is recognised as capital.
All other investment income is credited to the Income Statement as a revenue
item.
(e) Nature and purpose of equity and reserves
Share capital represents the 10p nominal value of the issued share capital.
The share premium account arose from the net proceeds of new shares and from
the excess proceeds received on the sale of shares from treasury over the
repurchase cost.
The capital redemption reserve represents the nominal value of shares
repurchased for cancellation.
The share purchase reserve was created from the cancellation in full of the
share premium account in 2002 and 2009. The cancellation and transfer were
approved by shareholders and confirmed by the Court. This reserve can only be
used for share repurchases, both into treasury or for cancellation. When
shares are subsequently reissued from treasury, the amount equal to their
repurchase cost is reflected in this reserve, with any proceeds in excess of
the repurchase cost transferred to the share premium account.
The special reserve was created from the cancellation in full of the share
premium account in July 2024. The cancellation and transfer were approved by
shareholders and confirmed by the Court, and following this £423,098,000 was
transferred into this reserve. This reserve is distributable, and can be used
for both share repurchases and dividends.
The capital reserve reflects any
● gains or losses on the disposal of investments;
● exchange movements of a capital nature;
● the increases and decreases in the fair value of investments
which have been recognised in the capital column of the income statement; and
● expenses which are capital in nature.
Any gains in the fair value of investments that are not readily convertible to
cash are treated as unrealised gains in the capital reserve.
The revenue reserve reflects cumulative income and expenditure recognised in
the revenue column of the Income Statement less cumulative dividends paid, and
is distributable by way of dividend.
The Company's distributable reserves consist of the share purchase reserve,
the special reserve, the capital reserve attributable to realised profits and
the revenue reserve. The share purchase reserve may only be used for share
repurchases, both into treasury or for cancellation.
(f) Expenses and finance costs
All expenses are accounted for on an accruals basis. Expenses are recognised
through the Income Statement as revenue items except as follows:
Management fee
In accordance with the Company's stated policy and the Directors' expectation
of the split of future returns, three quarters of the investment management
fee are charged as a capital item in the Income Statement. There is no
performance fee arrangement with the Manager.
Finance costs
Finance costs include interest payable and direct loan costs. In accordance
with Directors' expectation of the split of future returns, three quarters of
finance costs are charged as capital items in the Income Statement.
Arrangement costs for revolving credit facilities and Loan Notes are amortised
over the term of the borrowing.
Transaction costs
Transaction costs incurred on the acquisition and disposal of investments are
charged to the Income Statement as a capital item.
(g) Taxation
Irrecoverable taxation on dividends is recognised on an accruals basis in the
Income Statement.
Deferred taxation
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the financial reporting date, where
transactions or events that result in an obligation to pay more tax in the
future or right to pay less tax in the future have occurred at the financial
reporting date. This is subject to deferred tax assets only being recognised
if it is considered more likely than not that there will be suitable profits
from which the future reversal of the timing differences can be deducted.
Deferred tax assets and liabilities are measured at the rates applicable to
the legal jurisdictions in which they arise.
(h) Foreign currency translation
All transactions and income in foreign currencies are translated into sterling
at the rates of exchange on the dates of such transactions or income
recognition. Monetary assets and liabilities and financial instruments carried
at fair value denominated in foreign currency are translated into sterling at
the rates of exchange at the balance sheet date. Any gain or loss arising from
a change in exchange rates subsequent to the date of the transaction is
included as an exchange gain or loss in the Income Statement as either a
capital or revenue item depending on the nature of the gain or loss.
(i) Financial liabilities
Loan Notes and other borrowings are initially recorded at the proceeds
received net of direct issue costs and subsequently measured at amortised
cost.
(j) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents include bank
overdrafts repayable on demand and short term, highly liquid investments that
are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
(k) Estimates and assumptions
The preparation of financial statements requires the Directors to make
estimates and assumptions that affect items reported in the Balance Sheet and
Income Statement. Although these estimates are based on management's best
knowledge of current facts, circumstances and, to some extent, future events
and actions, the Company's actual results may ultimately differ from those
estimates, possibly significantly.
Estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the year in which the
estimates are revised and in any future periods affected. There have been no
estimates, judgements or assumptions which have had a significant impact on
the financial statements for the year.
(l) Dividend payable
Final dividends payable to equity shareholders are recognised in the financial
statements when they have been approved by shareholders and become a liability
of the Company. Interim dividends payable are recognised in the period in
which they are paid. The capital reserve, revenue reserve and special reserve
may be used to fund dividend distributions.
(m) Treasury shares
Treasury shares are recognised at cost as a deduction from equity
shareholders' funds. Subsequent consideration received for the sale of such
shares is also recognised in equity, with any difference between the sale
proceeds and the original cost being taken to share premium account. No gain
or loss has been recognised in the financial statements on transactions in
treasury shares.
2 Investments at fair value through profit or loss
2024 2023
£'000 £'000
(a) Summary of valuation
Analysis of closing balance:
UK quoted securities 257,290 107,156
Overseas quoted securities 841,988 1,188,691
Total investments 1,099,278 1,295,847
(b) Movements during the year:
Opening balance of investments, at cost 1,151,287 1,122,306
Additions, at cost 256,280 428,182
Disposals, at cost (399,860) (399,201)
Cost of investments at 31 December 1,007,707 1,151,287
Revaluation of investments to fair value:
Opening balance of capital reserve - investments held 144,560 180,299
Unrealised losses on investments held (52,989) (35,739)
Balance of capital reserve - investments held at 31 December 91,571 144,560
Fair value of investments at 31 December 1,099,278 1,295,847
(c) (Losses)/gains on investments in year (per Income Statement)
Gains on disposal of investments(1) 23,213 79,982
Net transaction costs (193) (608)
Special dividends received as capital 3,293 132
Unrealised losses on investments held (52,989) (35,739)
(Losses)/gains on investments (26,676) 43,767
(1) Gains on bookcost at purchase date upon disposal.
During the year, the Company incurred transaction costs on purchases totalling
in aggregate £316,000 (2023: £685,000) and on disposals totalling in
aggregate £326,000 (2023: £453,000). Following MiFID II, the Manager has
rebated £449,000 (2023: £530,000) in respect of transaction research costs
for the year ended 31 December 2024. Transaction costs are recorded in the
capital column of the Income Statement.
The Company received £433,349,000 (2023: £478,935,000) from investments sold
in the year. The bookcost of these investments when they were purchased was
£410,329,000 (2023: £399,201,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the
fair value of the investments.
During the year special dividends of £3,293,000 (2023: £132,000) were
recognised on an ex-dividend basis and treated as capital.
Classification of financial instruments
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
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.
The classification of the Company's investments held at fair value is detailed
in the table below:
31 December 2024 31 December 2023
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 1,099,278 - - 1,099,278 1,295,847 - - 1,295,847
1,099,278 - - 1,099,278 1,295,847 - - 1,295,847
The Company held no unquoted investments during the year and at the year end.
3 Income
2024 2023
£'000 £'000
Dividends from UK listed investments 2,340 1,401
Dividends from overseas listed investments 15,949 17,909
Scrip dividends received - 323
Total dividend income 18,289 19,633
Bank interest 487 646
Total Income 18,776 20,279
Dividends from overseas listed investments includes special dividends
classified as revenue of £292,000 (2023: £75,000).
4 Investment management fee
2024 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 2,105 6,315 8,420 2,320 6,960 9,280
Details of the investment management fee are given in the Directors' report
within the Annual Report. At 31 December 2024, investment management fee
accrued were £1,493,000 (2023: £2,225,000).
5 Other expenses
2024 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Auditor's fee(1) 50 - 50 48 - 48
Broker retainer fee 27 - 27 24 - 24
Custody fees 165 - 165 179 - 179
Depositary fees 93 - 93 95 - 95
Directors' fees(2) 187 - 187 157 - 157
Marketing fees 144 - 144 68 - 68
Registrar's fees 60 - 60 64 - 64
Secretary and administrator fees 267 - 267 266 - 266
Other expenses 358 - 358 242 - 242
1,351 - 1,351 1,143 - 1,143
(1) The auditor's fee for the statutory audit of these
financial statements was £49,875 (2023: £47,500), excluding VAT of £9,975
(2023: £9,500) and out of pocket expenses.
(2) Full detail of Directors' fees for the year is
provided in the Directors' Remuneration Implementation Report within the
Annual Report. Employer's National Insurance for Directors' fees is included
as appropriate in Directors' other costs. At 31 December 2024, Directors'
fees, Directors' expenses and national insurance outstanding were £nil (2023:
£nil).
6 Finance costs
2024 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest charges
Interest on bank loans and repaid
revolving credit facility ("RCF") - - - 426 1,276 1,702
Interest on current RCF 484 1,451 1,935 155 463 618
Interest on Loan Notes 665 1,997 2,662 205 616 821
1,149 3,448 4,597 786 2,355 3,141
Direct finance costs
Bank loans and repaid RCF - - - 3 9 12
RCF 27 82 109 9 29 38
Loan Notes 7 21 28 1 2 3
34 103 137 13 40 53
Total 1,183 3,551 4,734 799 2,395 3,194
Full details of the Company's borrowings are set out in note 11. The Company's
refinancing in 2023 comprised the issuance of Loan Notes and putting in place
a new RCF. The direct finance costs in relation to the Loan Notes and RCF
amounted to £252,000 and £217,000, respectively. These costs are amortised
over the life of the Loan Notes and the RCF on a straight-line basis.
7 Taxation
(a) Analysis of charge in the year
2024 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Overseas taxation 2,042 259 2,301 1,601 - 1,601
Decrease in CGT provision - (4) (4) - (133) (133)
Taxation 2,042 255 2,297 1,601 (133) 1,468
(b) Factors affecting total tax charge for the year:
The effective UK corporation tax rate applicable to the Company for the year
is 25.0% (2023: 23.5%). The tax charge differs from the charge resulting from
applying the standard rate of UK corporation tax for an investment trust
company. The standard rate UK corporation tax rate at 31 December 2024 was
25.0% (2023: 23.5%).
The differences are explained below:
2024 2023
£'000 £'000
Return on ordinary activities before taxation (18,349) 49,965
Corporation tax at 25.0% (2023: 23.5%) (4,587) 11,742
Effects of:
Non-taxable UK dividend income (585) (329)
Non-taxable overseas dividend income (3,779) (3,989)
Movement in unutilised management expenses 1,886 2,153
Movement on non-trade relationship deficits 1,062 599
Losses/(gains) on investments not taxable 7,017 (10,285)
(Gains)/losses in foreign currency movement (1,014) 109
Capital gains tax provision movement (4) (133)
Overseas taxation 2,301 1,601
Total tax charge for the year 2,297 1,468
(c) Investment companies which have been approved by the HM Revenue &
Customs under section 1158 of the Corporation Tax Act 2010 are exempt from tax
on capital gains. Due to the Company's status as an Investment Trust, and the
intention to continue meeting the conditions required to obtain approval in
the foreseeable future, the Company has not provided for deferred tax on any
capital gains or losses arising on the revaluation of investments.
(d) 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
year end.
Movements on the capital gains tax provision for the year
2024 2023
£'000 £'000
Provision brought forward 40 169
Capital gains tax cash movement (5) 4
Decrease in provision in year (4) (133)
Provision carried forward 31 40
(e) The Company has unrelieved excess management expenses and non-trade
relationship deficits of £111,078,000 (2023: £99,282,000). It is unlikely
that the Company will generate sufficient taxable profits in the future to
utilise these expenses and therefore no deferred tax asset has been
recognised. The unrecognised deferred tax asset calculated using a rate of 25%
(2023: 25%) amounts to £27,770,000 (2023: £24,821,000).
8 Return per share
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Revenue return after taxation (£'000) 12,095 14,416
Capital return after taxation (£'000) (32,741) 34,081
Net return (£'000) (20,646) 48,497
Weighted average number of ordinary shares 260,523,018 296,596,976
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 year.
There is no dilution to return per share as the Company has only ordinary
shares in issue.
9 Dividends
(a) Dividends paid in the year
2024 2023
Rate £'000 Rate £'000
Interim in lieu of final for the previous year 2.90p 7,983 2.50p 7,604
First interim for the current year 1.80p 4,623 1.70p 5,032
4.70p 12,606 4.20p 12,636
(b) Dividends paid and payable in respect of the financial year, which is the
basis on which the requirements of s1158-1159 of the Corporation Tax Act 2010
are considered
2024 2023
Rate £'000 Rate £'000
First interim for the current year 1.80p 4,623 1.70p 5,032
Second interim in lieu of final for the current year 3.20p 7,470 2.90p 7,983
5.00p 12,093 4.60p 13,015
The Board declared two dividends in respect of the year and expects to
continue paying two dividends annually.
10 Trade and other payables
2024 2023
£'000 £'000
Finance costs payable 1,583 1,442
Accrued management fee 1,493 2,225
Other accrued expenses 664 154
Amounts due to brokers for shares bought back 1,728 -
Total 5,468 3,821
11 Loan Notes and revolving credit facility
The Company has in place the following privately placed notes (the "Loan
Notes") issued to funds managed by Pricoa Private Capital:
● €20m maturing on 1 September 2030 with a floating coupon of
Euribor + 1.35%;
● €30m maturing on 1 September 2033 with a fixed coupon of
4.48%; and
● €10m maturing on 1 September 2035 with a fixed coupon of
4.63%.
In addition to the Loan Notes referred to above, the Company has in place a
two-year £80 million multi-currency floating rate RCF with Scotiabank,
expiring on 6 September 2025. The RCF has a non-utilisation fee of 52.5 basis
points.
The RCF is secured by a floating charge over the assets of the Company and
this floating charge has been extended to the Loan Notes, so that the two
lenders rank pari passu.
A summary of the Company's borrowings are as follows:
2024 2023
Loan Loan
currency currency
amount Bookcost amount Bookcost
Interest rate €'000 £'000 €'000 £'000
Loan Notes - Fixed and floating rate
Series A - Floating 2030 Euribor + 1.35% 20,000 16,470 20,000 17,263
Series B - Fixed 2033 4.48% 30,000 24,698 30,000 25,892
Series C - Fixed 2035 4.63% 10,000 8,232 10,000 8,630
49,400 51,785
RCF - floating rate
Non-sterling Six month EURIBOR +1.6% 40,800 33,716 40,943 35,312
83,116 87,097
The maturity profile of the Loan Notes and RCF are as follows:
2024 2023
Bookcost Bookcost
Payable at 31 December £'000 £'000
RCF payable in less than one year 33,716 -
RCF payable after more than one year - 35,312
Loan Notes payable after more than one year 49,400 51,785
83,116 87,097
The Company's Loan Notes and RCF contain the following covenants:
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 as described in the Gearing section of
the Investment Policy within the Annual Report.
There were no breaches of any covenants either in the year just ended or the
prior year.
12 Share capital
2024 2023
Number £'000 Number £'000
Issued and fully paid shares of 10p each
Brought forward 281,115,039 28,111 304,167,039 30,416
Shares bought back and held in treasury (41,253,520) (4,125) (23,052,000) (2,305)
Carried forward 239,861,519 23,986 281,115,039 28,111
Treasury shares of 10p each
Brought forward 24,508,500 2,451 1,456,500 146
Shares bought back and held in treasury 41,253,520 4,125 23,052,000 2,305
Carried forward 65,762,020 6,576 24,508,500 2,451
Share capital 305,623,539 30,562 305,623,539 30,562
During the year, the total cost of shares bought back was £161,148,000 (2023:
£89,315,000), of which £1,728,000 (2023: nil) was payable at the year end.
Total costs included the costs of the shares and other purchase costs
totalling £1,028,000 (2023: £452,000).
As at 31 March 2025, the latest practicable date before publication of this
report, a further 19,201,391 ordinary shares have been bought back at a total
cost of £73,957,429, including purchase costs of £441,000.
13 Net Asset Value per ordinary share
The net asset value per ordinary share at the year end are shown below. These
were calculated using 239,861,519 (2023: 281,115,039) ordinary shares in issue
at the year end (excluding treasury shares).
2024 2023
Net asset value Net asset value
attributable attributable
£'000 pence £'000 pence
Net Asset value - Debt at bookcost 1,028,084 428.62 1,222,484 434.87
A reconciliation of shareholders funds with debt at fair value is shown in the
Alternative Performance Measures within the Annual Report.
14 Transactions with the Manager and related party transactions
Details of the management contract can be found in the Directors' Report
within the Annual Report. Fees payable to the Manager are detailed in note 4
within the Annual Report. Since 1 January 2018, the Manager has agreed to
rebate commission which relates to research fees to the Company with such
amount disclosed in note 2.
A related party is a company or individual who has direct or indirect control
or who has significant influence over the Company. The Company has identified
the Directors as related parties. The Directors' emoluments for the year and
shareholdings have been disclosed within the Annual Report.
15 Financial risk management
As an investment trust, the Company invests in equities for the long-term so
as to enable investors to benefit from growth in the markets for cleaner or
more efficient delivery of basic services of energy, water and waste, as
stated in the Company's investment objective which can be found within the
Annual Report. In pursuing its investment objective, the Company is exposed to
a variety of risks that could result in either a reduction in the Company's
net assets or a reduction of the profits available for dividends. These risks
include market risk (comprising currency risk, interest rate risk, and other
price risk), credit risk and liquidity risk and the Directors' approach to the
management of them is set out below. These metrics are monitored by the AIFM.
The objectives, policies and processes for managing the risks, and the methods
used to measure the risks, are set out below.
Market risks
The potential market risks are (i) currency risk, (ii) interest rate risk, and
(iii) other price risk. Each is considered in turn below.
(i) Currency risk
The Company invests in global equity markets and therefore is exposed to
currency risk as it affects the value of the shares in the base currency.
These currency exposures are not hedged. The Manager monitors currency
exposure as part of its investment process. Currency exposures for the Company
as at 31 December 2024 are detailed in the table at the end of this note.
Currency sensitivity
The below table shows the strengthening/(weakening) of sterling against the
local currencies over the financial year for the Company's financial assets
and liabilities held at 31 December 2024.
2024 2023
% change(1) % change(1)
Australian Dollar 8.4 5.3
Canadian Dollar 6.9 2.8
Chinese Yuan 0.8 9.0
Danish Krone 4.8 2.3
Euro 4.9 2.1
Hong Kong Dollar (2.5) 5.6
Indian Rupee 1.1 6.5
Israeli Shekel (1.0) 8.2
Japanese Yen 6.8 13.4
Korean Won 12.3 8.1
Norwegian Krone 10.4 8.8
Swedish Krona 8.2 1.6
Swiss Franc 6.1 (4.3)
Taiwanese Dollar 5.4 5.5
US Dollar (1.9) 5.6
(1) Percentage change of Sterling against local currency
from 1 January to 31 December.
Based on the financial assets and liabilities at 31 December 2024 and all
other things being equal, if sterling had strengthened by 10%, the profit
after taxation for the year ended 31 December 2024 and the Company's net
assets at 31 December 2024 would have decreased by the amounts shown in the
table below. If sterling had weakened by 10% this would have had the opposite
effect.
2024 2023
Potential Potential
effect effect
£'000 £'000
Australian Dollar 2,876 2,535
Canadian Dollar 6,813 5,026
Chinese Yuan 3,599 2,339
Danish Krone - 2,636
Euro 9,991 17,983
Hong Kong Dollar - 1,361
Indian Rupee 2,210 3,598
Israeli Shekel 270 284
Japanese Yen - 1,694
Korean Won 1,656 1,248
Norwegian Krone 2,035 2,211
Swedish Krona 919 1,186
Swiss Franc 2,559 4,826
Taiwanese Dollar 1,504 1,691
US Dollar 57,985 61,677
Total 92,417 110,295
(ii) Interest rate risk
The Company had a mix of fixed and floating rate borrowings for both this and
the preceding year. The Company's borrowings are shown in note 11, including
detailing those borrowings which are floating Loan and subject to interest
rate risk.
The Company has a two-year £80 million multi-currency revolving credit
facility based on a floating reference interest rate plus a margin of 1.60%
per annum and a €20 million Loan Note due 2030 at EURIBOR+1.35%.
Prior to 6 September 2023, the Company had in place a £20 million
multi-currency revolving credit facility based on a floating reference
interest rate plus a margin of 1.70% per annum.
If rates had increased or decreased by 350 basis points the impact to the
Company's profit or loss would be:
2024 2023
Profit or loss Profit or loss
350 bps 350 bps 350 bps 350 bps
€'000 increase decrease €'000 increase decrease
31 December
Non-sterling Loan Note 20,000 (579) 579 20,000 (607) 607
Non-sterling RCF 40,800 (1,180) 1,180 40,943 (1,242) 1,242
(iii) Other price risk
The principal price risk for the Company is the price volatility of shares
that are owned by the Company. The Company is well diversified across
different sub-sectors and geographies.
At the year end the Company held investments with an aggregate market value of
£1,099,278,000 (2023: £1,295,847,000). All other things being equal, the
effect of a 10% increase or decrease in the share prices of the investments
held at the year end would have been an increase or decrease of £109,927,800
(2023: £129,584,700) in the profit after taxation for the year ended 31
December 2024 and the Company's net assets at 31 December 2024.
Overall sensitivity
The Manager has used the Parametric VaR to calculate value at risk ('VAR').
This model has been used to estimate the maximum expected loss from the
portfolio held at 31 December 2024 over 1 day, 5 day, 10 day and 21 day
periods given the historical performance of the fund over the previous five
years. The data in the previous five years is analysed under discrete periods
to provide 1 in 10, 1 in 20 and 1 in 100 possible outcomes. The results of the
analysis are shown below.
2024 2023
Expected as percentage Expected as percentage
at limit at limit
1 in 20 1 in 100 1 in 20 1 in 100
(95%) (99%) (95%) (99%)
1 day return 1.58 2.24 1.83 2.59
5 day return 3.54 5.01 4.10 5.80
10 day return 5.01 7.08 5.80 8.20
21 day return 7.26 10.27 8.40 11.89
The above analysis has been based on the following main assumptions:
● The distribution of share price returns will be the same in
the future as they were in the past.
● The portfolio weightings will remain as they were at 31
December 2024.
The above results suggest, for example, that there is a 5% or less chance of
the NAV falling by 3.54% or more over a 5 day period. Similarly, there is a
1% or less chance of the NAV falling by 2.24% or more on any given day.
Credit risks
BNP Paribas Securities Services (the 'Depositary') has been appointed as
custodian and depositary to the Company.
Cash at bank at 31 December 2024 included £12,606,000 (2023: £16,095,000)
held in its bank accounts at the Depositary. The Company also held £799,000
(2023: £709,000) in its accounts with NatWest Group plc. The Board has
established guidelines that, under normal circumstances, the maximum level of
cash to be held at any one bank should be the lower of i) 5% of the Company's
net assets and ii) £30 million. These are guidelines and there may be
instances when this amount is exceeded for short periods of time.
Substantially all of the assets of the Company at the year end were held by
the Depositary or sub-custodians of the Depositary. Bankruptcy or insolvency
of the Depositary or its sub-custodians may cause the Company's rights with
respect to securities held by the Depositary to be delayed or limited. The
Depositary segregates the Company's assets from its own assets and only uses
sub-custodians on its approved list of sub-custodians. At the year end, the
Depositary held £1,099,278,000 (2023: £1,295,847,000) in respect of quoted
investments.
The credit rating of the Depositary, which is a Fitch rating of A+, was
reviewed at the time of appointment and is reviewed on a regular basis by the
Manager and/or the Board.
Credit risk arising on transactions with brokers relates to transactions
awaiting settlement. Risk relating to unsettled transactions is considered to
be low as trading is almost always done on a delivery versus payment basis.
There is credit risk on dividends receivable during the time between
recognition of the income entitlement and actual receipt of dividend.
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its
obligations for financial liabilities as they fall due. This risk is minimised
because a majority of the Company's investments are in readily realisable
securities which can be sold to meet funding commitments. The maturity profile
analysis of the Company's financial liabilities is shown below. The Company
does not have derivative financial liabilities and the amounts shown are
undiscounted.
Financial liabilities by maturity at the year end are shown below on an
undiscounted basis:
2024 2023
Within Within More than Within Within More than
1 year 1-3 years 3 years Total 1 year 1-3 years 3 years Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan Notes - - 49,400 49,400 - - 51,785 51,785
RCF 33,716 - - 33,716 - 35,312 - 35,312
Interest cash flows on
Loan Notes 2,213 6,669 10,116 18,998 2,280 6,640 12,358 21,278
Interest cash flows on RCF 1,877 - - 1,877 1,883 1,412 - 3,295
Cash flows on other
creditors 2,157 - - 2,157 2,379 - - 2,379
39,963 6,669 59,516 106,148 6,542 43,364 64,143 114,049
Financial assets and liabilities
All liabilities carrying amount approximates fair value.
The Company's financial assets and liabilities at 31 December 2024 comprised:
2024 2023
Non- Non-
Interest interest Interest interest
bearing bearing Total bearing bearing Total
£'000 £'000 £'000 £'000 £'000 £'000
Investments
Australian Dollar - 28,759 28,759 - 25,347 25,347
Canadian Dollar - 68,046 68,046 - 50,159 50,159
Chinese Yuan - 35,986 35,986 - 23,394 23,394
Danish Krone - - - - 26,360 26,360
Euro - 183,810 183,810 - 268,371 268,371
Hong Kong Dollar - - - - 13,613 13,613
Indian Rupee - 22,128 22,128 - 35,979 35,979
Israeli Shekel - 2,700 2,700 - 2,837 2,837
Japanese Yen - - - 16,840 16,840
Korean Won - 16,557 16,557 - 12,483 12,483
Norwegian Krone - 20,352 20,352 - 22,111 22,111
Sterling - 96,294 96,294 - 107,156 107,156
Swedish Krona - 9,187 9,187 - 11,863 11,863
Swiss Franc - 25,243 25,243 - 48,258 48,258
Taiwanese Dollar - 15,036 15,036 - 16,604 16,604
US Dollar - 575,180 575,180 - 614,472 614,472
- 1,099,278 1,099,278 - 1,295,847 1,295,847
Other assets and liabilities
Cash and cash equivalents
Sterling 11,262 - 11,262 14,612 - 14,612
Taiwanese Dollar - - - 303 - 303
Chinese Yuan 1 - 1 - - -
US Dollar 2,142 - 2,142 1,889 - 1,889
13,405 - 13,405 16,804 - 16,804
Short term debtors and creditors
Sterling - (3,625) (3,625) - (2,234) (2,234)
Canadian Dollar - 86 86 - 97 97
Euro (33,717) (786) (34,503) - (1,442) (1,442)
Japanese Yen - - - - 98 98
Swiss Franc - 346 346 - - -
US Dollar - 2,528 2,528 - 411 411
(33,717) (1,451) (35,168) - (3,070) (3,070)
Long-term creditors
Euro (49,400) - (49,400) (87,097) - (87,097)
Indian Rupee - (31) (31) - - -
(49,400) (31) (49,431) (87,097) - (87,097)
Total (69,712) 1,097,796 1,028,084 (70,293) 1,292,777 1,222,484
Capital management
The Company considers its capital to consist of its share capital of Ordinary
Shares of 10p each and its reserves. At 31 December 2024 there were
305,623,539 ordinary shares in issue (2023: 305,623,539) of which 65,762,020
ordinary shares were held in treasury (2023: 24,508,500).
The Manager and the Company's broker monitor the demand for the Company's
shares and the Directors review the position at Board meetings. Further
details on shares bought during the year and the Company's policies for
issuing and buying back shares can be found in the Directors' Report.
The Company's policy on borrowings is detailed in note 11 within the Financial
Statements.
Alternative Performance Measures ("APMs") (unaudited)
APMs are often used to describe the performance of investment companies
although they are not specifically defined under FRS 102. The Directors assess
the Company's performance against a range of criteria which are viewed as
relevant to both the Company and its market sector. APM calculations for the
Company are shown below.
Gearing
A way to magnify income and capital returns, but which can also magnify
losses. A bank loan is a common method of gearing.
At 31 December 2024 2023
Total assets less cash/cash equivalents (£'000) a 1,103,294 1,296,637
Net assets (Debt at fair value) (£'000) b 1,025,577 1,220,980
Gearing (net) (a÷b)-1 7.6% 6.2%
Leverage
Under the Alternative Investment Fund Managers Directive ("AIFMD"), leverage
is any method by which the exposure of an Alternative Investment Fund ("AIF")
is increased through borrowing of cash or securities or leverage embedded in
derivative positions.
Under AIFMD, leverage is broadly similar to gearing, but is expressed as a
ratio between the assets (excluding borrowings) and the net assets (after
taking account of borrowing). Under the gross method, exposure represents the
sum of the Company's positions after deduction of cash balances, without
taking account of any hedging or netting arrangements. Under the commitment
method, exposure is calculated without the deduction of cash balances and
after certain hedging and netting positions are offset against each other.
Ongoing charges
A measure, expressed as a percentage of daily net asset value (debt at fair
value) during the year, of the regular, recurring annual costs of running an
investment company.
At 31 December Page 2024 2023
Average NAV (£'000) a n/a 1,137,050 1,253,409
Investment management fee (£'000) b 84 8,420 9,280
Other expenses* (£'000) c 85 1,089 1,143
(b+c)÷a 0.84% 0.83%
* Expenses that are not recurring, such as one-off legal fees and director
recruitment fees, are excluded from other expenses .
Premium/Discount
The amount, expressed as a percentage, by which the share price is more/less
than the Net Asset Value per ordinary share.
At 31 December 2024 2023
NAV per ordinary share (Debt at fair value) (p) a 427.58 434.34
Share price (p) a 385.50 400.00
(Discount)/premium (b÷a)-1 (9.8)% (7.9)%
Total return
A measure of performance that includes both income and capital returns. This
takes into account capital gains and reinvestment of dividends paid out by the
Company into its ordinary shares on the ex-dividend date.
NAV NAV
Share (Debt at (Debt at
Year ended 31 December 2024 price fair value) bookcost)
Opening at 1 January 2024 (p) a 400.00 434.34 434.87
Closing at 31 December 2024 (p) b 385.50 427.58 428.62
Dividend/income adjustment factor(1) c 1.01064 1.01176 1.01052
Adjusted closing (d = b x c) d 389.60 432.60 433.13
Total return (d÷a)-1 -2.6% -0.4% -0.4%
NAV NAV
Share (Debt at (Debt at
Year ended 31 December 2023 price fair value) bookcost)
Opening at 1 January 2023 (p) a 419.49 419.49 419.49
Closing at 31 December 2023 (p) b 400.00 434.34 434.87
Dividend/income adjustment factor(1) c 1.0099 1.0093 1.0090
Adjusted closing (d = b x c) d 403.98 438.38 438.80
Total return (d÷a)-1 -3.7% 4.5% 4.6%
(1) The dividend adjustment factor is calculated on the
assumption that dividends paid out by the Company are reinvested into the
shares of the Company at NAV at the ex-dividend date.
Net asset value - debt at fair value
The net asset value per ordinary share with debt at fair value at the year end
are shown below. These were calculated using 239,861,519 (2023: 281,115,039)
ordinary shares in issue.
2024 2023
Net asset value Net asset value
attributable attributable
£'000 pence £'000 pence
Net asset value - Debt at bookcost (note 13) a 1,028,084 428.62 1,222,484 434.87
Add: Loan Notes at bookcost (note 11) b 49,400 20.60 51,785 18.42
Less : Loan Notes at fair value c (51,907) (21.64) (53,289) (18.95)
Net asset value - Debt at fair value a+b+c 1,025,577 427.58 1,220,980 434.34
The fair value of the Loan Notes is derived by aggregating the discounted
value of future cashflows, being the contractual interest payments and the
repayment of capital at maturity as each falls due. Discount rates are
determined based on the closest available maturity, using the EUR Mid-Swap
Rate for fixed-rate tranches and the Euro short-term rate Overnight Index Swap
curve for floating-rate tranches. Both rates are adjusted for appropriate
credit spreads and illiquidity premia. For 2023, the discount rate for each
tranche reflects the yield from the Euro Benchmark curve of similar maturity
for each tranche and the spread of similar credit rated loans as observed via
the ICE Bank of America Merrill Lynch Fixed Income Index.
The fair value of the Loan Notes is calculated by an independent debt
valuation specialist firm and the NAV with debt at fair value uses this value.
For 2023, the valuer's mid point valuation was used and was not materially
different from the NAV with debt at fair value in the table above,
The fair value of the Company's RCF is not an adjustment in the reconciliation
of NAV with debt at bookcost to NAV with debt at fair value due to the fact
that the RCF is valued at bookcost, which approximated to fair value.
Financial Information
This announcement does not constitute the Company's statutory accounts. The
financial information for the year to 31 December 2024 is derived from the
statutory accounts for 2024, which will be delivered to the Registrar of
Companies. The auditor has reported on the 2024 accounts; their report was
unqualified and did not include a statement under Section 498(2) or (3) of the
Companies Act 2006.
The Annual Report for the year ended 31 December 2024 and the Circular and
Notice of AGM was approved on 2 April 2025. Both will be made available on the
Company's website at www.impaxenvironmentalmarkets.co.uk.
The Annual Report and the Circular and Notice of AGM will be submitted to the
National Storage Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
This announcement contains regulated information under the Disclosure Guidance
and Transparency Rules of the FCA.
For further information contact:
Montfort Communications iem@montfort.london (mailto:iem@montfort.london)
Gay Collins/Nita Shah 07798 626282
Apex Listed Companies Services (UK) Limited +44 (0) 7443 970082
Company Secretary
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