Impax Asset Management Group plc

Results for the year ended 30 September 2020

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London 3 December 2020 - Impax Asset Management Group plc ("Impax" or the "Company"), the specialist investor focused on the transition to a more sustainable global economy, today announces final audited results for the year ending 30 September 2020 (the "Period").

Business highlights

���� Assets under management ("AUM") increased 34% to �20.2 billion (2019: �15.1 billion)

���� Net inflows of �3.5 billion (2019: �1.4 billion)

���� Major investment strategies have continued to outperform global and regional markets

���� Net inflows of over �1.9 billion in the first two months of the new financial year contributed to AUM rising to �23.4 billion by 30 November

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�Financial highlights

���� Revenue increased 19% to �87.5 million (2019: �73.7 million)

���� Adjusted operating profit grew by 29% to �23.3 million (2019: �18.0 million)

���� Profit before tax of �16.7 million (2019: �18.9 million)

���� Shareholders' equity increased 13% to �71.5 million (2019: �63.2 million)

���� Proposed final dividend of 6.8 pence per share (2019: 4.0 pence) which together with the interim dividend of 1.8 pence per share (2019: 1.5 pence) gives a total for the year of 8.6 pence per share (2019: 5.5 pence), up 56%.

���� Cash reserves of �37.4 million (2019: �26.2 million)

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Keith Falconer, Chairman, commented:

"Impax has proven highly resilient throughout the COVID-19 crisis to deliver outstanding success. Over the Period we expanded our headcount by 12% and I am also very pleased that the functional integration of the New Hampshire-based Pax World Management business, which Impax acquired in January 2018, is largely complete. Furthermore, we signed an updated distribution agreement with BNP Paribas Asset Management that cements our long-term relationship with this important partner."

Ian Simm, Chief Executive, added:

"I would like to thank all my colleagues who have worked extremely hard and effectively to deliver Impax's excellent set of results, marked by multiple industry awards and significant growth across key performance indicators.

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"Over the 12 months to 30 September 2020, our AUM increased by 34% to �20.2 billion and has expanded further in the first two months of the new financial year, reaching �23.4bn on 30 November 2020.� Year-on-year, our revenue was up 19%, driven by annual net inflows of �3.5 billion into the funds and accounts that we manage (up from �1.4 billion in the prior year).� We have sustained strong investment performance across major investment strategies and currently have a solid pipeline of potential new business.

"Impax's investment thesis is based on our belief that companies that are benefiting from the transition to a more sustainable economy should, on average, out-perform their peers in other markets. Over the past 12 months we have seen further evidence supporting this view. There are strong reasons to believe that governments, investors and consumers are seeking to steer capital towards markets that offer inherent resilience to environmental and social problems."

Enquiries:

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Impax Asset Management Group plc

Ian Simm, Chief Executive ��������������� ����������������������� +44 (0)20 7434 1122 (switchboard)

Paul French, Corporate Communications Director

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Montfort Communications

Gay Collins����������������������������������������� ����������������������� +44(0)77 9862 6282

Louis Supple ������������������������������������� ����������������������� +44(0)77 3943 0102

[email protected]

Peel Hunt LLP, Nominated Adviser

James Britton or Rishi Shah ������������� ����������������������� +44 (0)20 7418 8900

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LEI number: 213800AJDNW4S2B7E680

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CHAIRMAN'S INTRODUCTION

COVID-19 has affected all our lives. During what has been a very difficult time for businesses around the world, the Board has been impressed that Impax has not only proven highly resilient throughout the crisis but has gone beyond just "business as usual" to deliver outstanding success. On behalf of my fellow Directors, I would like to pay tribute to the management team for leading the further expansion of the Company and to all our staff for their continued commitment and diligence while working away from the office.

During the 12 months to 30 September 2020 (the "Period"), Impax's assets under management and advice ("AUM") grew by 34% to �20.2 billion. Investment performance has been strong across all our major strategies. These results are reflected in the many prestigious industry awards that Impax won last year.

Over the Period we expanded our headcount by 18 (12%) to ensure we had sufficient resources in investment management, client service and in each of the support teams. I am also very pleased that the functional integration of the business in New Hampshire, which Impax acquired in January 2018, is largely complete.� Furthermore, we signed an updated distribution agreement with BNP Paribas Asset Management that cements our long-term relationship with this important partner.

In addition to highlighting the Company's successful growth in AUM and profitability I would also like to draw attention to a number of important non-financial developments, as you would expect from an investment manager which focuses beyond the short-term financial results. Achieving our vision and business goals requires a culture where Impax colleagues can deliver their best, adapt and learn continuously, and stay ahead in an increasingly competitive arena. To this end, the senior management team has refreshed our objectives in the management of talent and has introduced a structured programme of leadership training.

We have also made good progress in the area of equality, diversity and inclusion, in particular with the formation of a Company-wide group to coordinate our initiatives in this area; Lindsey Brace Martinez regularly attends the meetings of this group as the Board sponsor of this work. We remain focused on increasing the number of women in our business, especially at senior levels, which over time will continue to reduce the senior management gender pay gap.

We also continue to make strides with our sustainability initiatives, including a new commitment to retain our "net carbon positive" status across our operations and corporate investments.

These important developments and our strong long-term investment performance have been recognised and applauded by the investment industry again this year.� In addition to the numerous awards we have won, I congratulate Ian Simm on his recognition from Financial News as "Industry Leader of the Year (male)".

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Keith Falconer

2 December 2020

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CHIEF EXECUTIVE'S REPORT

I am pleased to report that Impax has had an outstanding year. During the 12 months ending 30 September 2020 (the "Period"), the Company's assets under discretionary and advisory management ("AUM") increased by 34% to �20.2 billion, which included �3.5 billion of net inflows into the funds and accounts that we manage. By 30 November 2020, AUM had reached �23.4 billion.

Impax has remained fully operational since the start of the pandemic. We have focused on protecting the health and safety of our colleagues, while continuing to provide a seamless service to clients and fulfilling obligations to our shareholders and other stakeholders. We have sustained strong investment performance while we have also been able to expand our operations and team in line with the needs of the business.

Highly attractive investment opportunities

Government policies around the world continue to support our investment thesis, and this year we have witnessed more debate than ever before on what a sustainable economy will look like.

Impax's investment thesis is based on our belief that companies that are benefiting from the transition to a more sustainable economy should, on average, out-perform their peers in other markets. Over the past 12 months we have seen further evidence supporting this view.

While global health care and related social issues have dominated the policy and media agendas in recent months, the impact of climate change has never been more keenly felt. This year has seen the worst wildfires in US history, and summer in the northern hemisphere has been the hottest since records began, with the coverage of Arctic sea-ice reaching another historical low. The impacts of climate change have been largely in line with scientific models, but the human and social cost appears to be much greater than expected.

Against this backdrop, there are many compelling reasons for optimism, with large flows of private capital into climate-mitigating technologies and business models, shareholder activism against the worst polluters, rapidly rising consumer interest, and ever more robust environmental regulation.

Investment performance

The listed equity strategies managed by our London-centred team have performed well. The two largest strategies, Water and Leaders, posted increases of 9.6% and 14.8% respectively for the Period, against their global comparator index, the MSCI All Country World ("ACWI") which returned 5.3%. The Specialists strategy, which is the basis for our UK investment trust, Impax Environmental Markets plc, returned 13.9%, and in March, this trust joined the FTSE 250 index.

The Asia-Pacific strategy was the standout performer with returns of 19.3% reflecting the strong recovery in most regional stock markets, while our fastest-growing strategy, Global Opportunities, returned 12.9%, outperforming the ACWI by 7.6%. The Sustainable Food strategy, which has a relatively defensive investment approach, returned 3.3%, 2% below ACWI but outperforming its specialist benchmark by 5.6%.

Performance from the Pax World Funds managed by our US-based team has improved considerably, with more than half of the funds significantly outperforming their benchmarks, and three funds ranked in the top decile of their respective peer groups. This fund range has had positive net inflows of over USD380 million over the Period, with allocations focused on the Pax Global Environmental Markets Fund, Pax Global Women's Leadership Fund and the Pax Large Cap fund.

Real Assets

Our team investing in markets linked to renewable power generation made good progress in investing our third fund, Impax New Energy Investors III ("NEF III"), committing additional capital in Norway, France and Germany and making its first commitments in Spain. We expect this fund to be fully invested by the end of 2021 and are advancing our plans to raise additional capital in this area.

Client Service and Business Development

Impax experienced another year of strong net inflows from investors around the world.

This year our business development in the UK has been particularly successful. The Global Opportunities mandate that we manage on behalf of St James's Place recorded net inflows of �877 million, while our Irish UCITS fund range received �269 million on a net basis. In Continental Europe total net inflows were �1.1 billion, with contributions from direct sales to institutional investors and from our distribution partners, particularly Formuepleje in Denmark, ASN Bank in the Netherlands, and BNP Paribas Asset Management ("BNPP") across multiple countries in the region.

In November 2020, we announced that BNPP had executed its plan to reduce its holding in the Company from c.24.5% to c.14.0%, having seen a very positive return on their original investment made in 2007. BNPP remains Impax's largest shareholder and a key distribution partner. The relationship was cemented with a new distribution agreement on very similar terms to the Memorandum of Understanding covering distribution that has been in place since 2007.

Although the pandemic delayed some institutional mandate searches, we expect these to catch up in 2021. Our North American business had another strong year, with positive net inflows of USD 778 million. We are seeing an increasing number of buy recommendations from investment consultants and are continuing to build our relationships with leading asset owners in the US. We also extended our work in Canada, with new sub-advisory mandates for NEI Investments and Desjardins.

Beyond investment returns

In addition to the pursuit of excellent investment returns, we focus on four broader areas. First, our corporate engagement aims to enhance our understanding of investment risk. In 2019 we engaged with over 100 companies, or close to half of all those in which we invest.

Second, as pioneers in the calibration of the positive environmental impact of our investments, we have issued our sixth annual Impact Report which covers listed equities and also describes how we have applied our methodology to the fixed income portfolios that we manage.

Third, we have strengthened our connections to the environmental science community with the aim of augmenting our work on climate risk and, more recently, biodiversity. In October we published a white paper on physical climate risk and have also become a core member of the Coalition for Climate Resilient Investment and joined efforts to set up a new Task Force on Nature-related Financial Disclosures.

And finally, this year we also have expanded our specialist policy team in order to deepen our policy insights as well as our contributions to the development of effective future laws and regulations. Over the year, we have joined a number of organisations and initiatives, including the Confederation of British Industry's Energy & Climate Change Board, the Climate Financial Risk Forum and the Energy Transitions Commission.

Developing Impax's talent

We have continued to recruit through the pandemic, and our team now comprises 175 individuals, an increase in headcount of 12% since the start of the Period.

As our volume of business has grown, we have also taken several important steps to expand and strengthen our HR operations and talent management systems. This has included refreshing our objectives to ensure that our colleagues can thrive in their current roles and also look forward to attractive career prospects. This year we have focused on developing the leadership skills of our managers, mapping out plans to enhance equality, diversity and inclusion, and, in these challenging times, are devoting particular attention to supporting our colleagues' well-being and mental health.

We have accelerated the integration of our New Hampshire-based team, who joined us in 2018 following the acquisition of Pax World Management LLC. We have now completed the formation of global teams in several areas, including actively managed listed equities, trading, finance, compliance and HR, and have undertaken additional integration projects in marketing and the definition of a common corporate culture.

Awards and industry recognition

In April Impax was honoured to receive the Queen's Award for Enterprise in the Sustainable Development category for a second time. This represents a significant endorsement of the team's hard work over the past two decades in encouraging companies to improve their sustainability as well as supporting the growth of pioneering new sustainable businesses.

The Company's expertise has also been acknowledged through numerous prestigious industry awards again this year. These include the Global Investor Investment Excellence awards 2020 (Boutique Manager of the year), FT Pensions Expert PIPA Awards (highly commended in the ESG/SRI Manager of the Year category) and Impax was named one of the Corporate Knights' "Green 50 Top Business Moves for the Planet" list. Furthermore, after Period end we were proud to announce three further award wins: "Ambition Nation Listed 50" award (from Finncap), "Boutique of the Year - Equities" from Financial News, and "European Specialist Investment Firm of the Year" from Funds Europe.

In the United States Pax World Funds was recognised by Bloomberg and the United Nations as one of "50 Climate Leaders" and Ethical Corporation assigned a coveted "Highly Commended" designation to the Pax Ellevate Global Women's Leadership Fund. Joe Keefe, President, was acknowledged as one of the "10 leaders of ESG and Impact Investing" in the US by Investment News and Impax joined the "Best Companies to Work for in New Hampshire" Hall of Fame.

For the seventh consecutive year, Impax has been awarded A+ and A scores across all applicable categories in the UN-backed Principles for Responsible Investment (PRI) assessment report of Environmental, Social and Governance (ESG) integration efforts.

Finally, in November 2020, Morningstar described Impax as a "Leader" for its ESG Commitment, one of only six asset managers globally to be awarded the highest grade.

Brexit

Given the political uncertainties and the current perceived lack of provision for financial services, we are planning for our Dublin office to be fully operational in December 2020. We only expect to transfer a small number of clients, representing less than 2% of current AUM. The required associated activities, including some limited recruitment, are advancing in line with our plans.

Outlook

Since the late 1990s Impax has argued that many of those companies that are tackling the environmental problems arising from human activity are set to out-perform their peers in other sectors. More recently, we have extended our analysis and argued that the transition to a more sustainable global economy is accelerating, and that companies whose business models address social issues are providing additional investment opportunities.

We also consider the recent result of the US election to be positive for the markets in which Impax invests. In addition to his commitment to bring the US back into the Paris Climate agreement, President-elect Biden appears determined to address the profound sustainability challenges facing the country, including a climate plan to invest $2 trillion over four years with targeted zero-emissions power generation by 2035 and a net-zero economy by 2050. Investors are also hopeful that the Democrats will improve ESG integration and disclosure.

This year the effects of COVID-19 have amplified many of the issues associated with investing in the transition to a more sustainable economy, but recent events have also reinforced our investment case. There are strong reasons to believe that governments, investors and consumers are seeking to steer capital towards markets that offer inherent resilience to environmental and social problems.

Nevertheless, the contours of the post pandemic landscape are not yet clear and the timing of the economic recovery remains uncertain. Corporate balance sheets have been severely impacted, some dividends cancelled or reduced, and we can expect to see many more companies looking to raise capital. Until the roadmap out of the pandemic becomes clearer, we are likely to see considerable volatility across financial markets.

We continue to invest in order to grow the Company and are well positioned for further expansion that should enhance value for all our stakeholders.

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Ian Simm

2 December 2020

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FINANCIAL REVIEW

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I am pleased to report very strong financial results and strong growth for all our financial KPIs.

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As in previous periods, in order to facilitate comparison of performance with past periods, and to provide an appropriate comparison with our peers, the Board encourages shareholders to focus on financial measures after adjustment for accounting charges or credits arising from the acquisition accounting for Impax NH, and adjustments arising from the accounting treatment of National Insurance costs on share-based payment awards.

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Financial highlights for financial year 2020 versus financial year 2019

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Revenue

Revenue for the Period grew by �13.8 million to �87.5 million (2019: �73.7 million). Growth was driven by continued strong net inflows across the business and robust performance, offset to some extent by the market falls seen in February and March.

Our run-rate revenue at the end of the Period was �96.5 million (2019: �78.3 million), giving a weighted average run rate revenue margin of 48 basis points (2019: 52 basis points) on the �20.2 billion of AUM.

Operating costs

Adjusted operating costs increased to �64.3 million (2019: �55.7 million), mainly reflecting planned increases in headcount and higher profit-related pay due to the rising profitability. We continue to invest selectively in the business to take advantage of strong growth opportunities so we expect that there will be some cost increases in the near term.

IFRS operating costs include additional charges and credits, principally the amortisation of intangible assets arising on the Impax NH acquisition, National Insurance charges on share options and restricted shares and in 2019 a credit for the release of a contingent consideration provision related to the NH acquisition. Employer's National Insurance is payable based on the share price when an option is exercised or restricted shares vest and accordingly the charge has increased significantly as our share price has risen over the year. This is offset by a tax credit which is recorded in equity.

Profits

Adjusted operating profit increased to �23.3 million (2019: �18.0 million), driven by the revenue growth described above. Run-rate adjusted operating profits at the end of the Period grew further to �28.3 million (2019: �20.5 million), in line with business expansion. IFRS operating profit in 2020 fell to �17.6 million (2019: �18.8 million), as 2019 benefited from the credit for the release of contingent consideration described above. Fair value gains and losses and other financial income partially offset interest expense and finance costs to give adjusted profit before tax of �22.2 million (2019:��18.1�million).

Tax

Tax rates were lower than last year as the Group benefited from a �1.0 million credit in relation to taxation of the prior years' private equity income.

Earnings per Share

Adjusted diluted earnings per share grew to 14.5 pence (2019: 11.5 pence) as a result of the growth in profits. IFRS diluted earnings per share however fell to 10.5 pence (2019: 12.1 pence) as 2019 benefited from the contingent consideration credit described above.

Financial management

At the Period end the Company held �37.4 million of cash reserves, an increase of �11.2 million on 2019. The Company had no debt (2019: no debt) but retains access to a US$13 million revolving facility (the "RCF") (LIBOR plus 3.3%), which was put in place at the time of the acquisition of Impax NH.

The Company continues to make seed investments and to invest in its private equity funds. These investments were valued at �4.3 million at the Period end. During the Period we redeemed �2.0 million by exiting the seed investment in our successful US mutual fund which is managed under the Global Opportunities strategy. The cash realised is planned to be re-invested after the year end into a segregated account investing in our new Asian Opportunities Strategy.� We also invested �0.8 million into our third private equity fund.

We adopted the new accounting standard IFRS 16 which covers accounting for leases during the Period. This has required us to recognise new assets, representing the leases on our office buildings, and a corresponding lease liability.

Share management

The Board intends that the Company will continue to purchase its own shares from time to time after due consideration of attractive alternatives for the use of the Company's cash resources. Shares purchased may be used to satisfy obligations linked to share incentive awards for employees. Share purchases are usually made by funding the Company's Employee Benefit Trusts ("EBTs") which will then settle option exercises or hold shares for Restricted Share awards until they vest.

During the Period, the EBTs spent �4.2 million buying 1.3 million of the Company's shares at an average price of 332 pence. At the Period end, the EBTs held a total of 5.2 million shares, 4.8 million of which were held for Restricted Shares leaving up to 0.4 million shares available for option exercises and future share incentive awards. Net options outstanding at the Period end were 2.5 million of which 0.1 million were exercisable.

The Company did not issue any shares in the Period. Equity issuance may arise in respect of staff option exercises or restricted share awards that have not been previously matched by share purchase into the EBTs, and in January 2021, conversion at the Company's discretion into Impax shares of Impax NH management's remaining 16.7% interest in Impax NH.

Dividends

The Company paid an interim dividend of 1.8 pence per share in July 2020. Last year we announced a new policy of paying, in normal circumstances, an annual dividend within a range of 55% and 80% of adjusted profit after tax. Despite the unforeseen challenges of COVID-19, Impax has reported strong growth in revenue and profits and is in robust financial health. The Board is therefore recommending a final dividend of 6.8 pence. This would be an increase in the total dividend for the year of 3.1 pence or 56%, while still being at the lower end of our stated range.

This dividend proposal will be submitted for formal approval by shareholders at the Annual General Meeting on 18 March 2021. If approved, the dividend will be paid on, or around, 26 March 2021. The record date for the payment of the proposed dividend will be 19 February 2021 and the ex-dividend date will be 18 February 2021.

The Company operates a dividend reinvestment plan ("DRIP"). The final date for receipt of elections under the DRIP will be 5 March 2021. For further information and to register and elect for this facility, please visit www.signalshares.com and search for information related to the Company.

Going concern

The Financial Reporting Council requires all companies to perform a rigorous assessment of all the factors affecting the business when deciding to adopt a "going concern" basis for the preparation of the accounts.

The Board has made an assessment covering a period of at least 12 months from the date of approval of this report which indicates that, taking account of a reasonably possible downside in relation to asset inflows, market performance and costs, the Group will have sufficient funds, to meet its liabilities as they fall due for that period. In making this assessment the Board has considered the potential evolving impacts of COVID-19. �The Group has appropriate cash balances and no debt and, at the Period end market levels, is profitable. A significant part of the Group's cost basis is profit related pay. The Group can also preserve cash through dividend reduction and through issuance of shares to cover share option exercises/restricted share awards (rather than purchasing shares). �The Group has operated without disruption during the lockdown periods to date and expects to continue to do so. Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

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Charlie Ridge

2 December 2020

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Consolidated Income Statement

For the year ended 30 September 2020

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Adjusted results are provided in note 4.

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2020

All amounts in other comprehensive income may be reclassified to income in the future.

The statement has been prepared on the basis that all operations are continuing operations.

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Consolidated Statement of Financial Position

As at 30 September 2020

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Consolidated Statement of Changes in Equity

For the year ended 30 September 2020

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Consolidated Cash Flow Statement

For the year ended 30 September 2020

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Cash and cash equivalents under IFRS does not include deposits in money market funds and cash held in deposits with more than an original maturity of three months. The Group however considers its total cash reserves to include these amounts. Cash held in RPA accounts are not included in cash reserves.

Movements on cash reserves are shown in the table below:

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NOTES TO THE FINANCIAL STATEMENTS

1�� REPORTING ENTITY

Impax Asset Management Group plc (the "Company") is incorporated and domiciled in the UK and is listed on the Alternative Investment Market ("AIM"). These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the "Group").

2�� BASIS OF PREPARATION

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") adopted for use by the European Union.

The financial statements have been prepared under the historical cost convention, with the exception of the revaluation of certain investments and derivatives being measured at fair value.

The financial statements are presented in Sterling. All amounts have been rounded to the nearest thousand unless otherwise indicated.

Going concern

The Board has made an assessment covering a period of 12 months from the date of approval of these financial statements which indicates that, taking account of a reasonably possible downside assumptions in relation to asset inflows, market performance and costs, the Group will have sufficient funds to meet its liabilities as they fall due and regulatory capital requirements for that period. In making this assessment the Board has considered the potential ongoing impact of Covid-19. The Group has sufficient cash balances and no debt and, at the year- end market levels, is profitable. A significant part of the Group's cost basis is variable as bonuses are linked to profitability. The Group can also preserve cash through dividend reduction and through issuance of shares to cover share option exercises/restricted share awards (rather than purchasing shares). The Group has operated without disruption during the lockdown periods to date and expects to continue to do so. Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

3�� USE OF JUDGEMENTS AND ESTIMATES

In preparing these financial statements management has made estimates that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates. Revisions to estimates are recognised prospectively.

The significant key source of estimation uncertainty were estimates made in determining if intangible assets, acquired on acquisition of NH were impaired. The intangible assets acquired represent investment management contracts. These are amortised over an 11 year life which is considered reasonable given the nature of the investors into these Funds. If there are any indications of impairment they are tested for impairment at each reporting date. The fair value at the date of acquisition was calculated using the discounted cash flow methodology and represented the valuation of the profits expected to be earned from the management contracts in place at the date of acquisition. The impairment test completed this year showed no impairment was required and used the following key assumptions - future subscription of new assets of US$0.34bn per annum on average (2019: USD$0.34bn), future equity fund performance of 5 per cent (2019: 5 per cent), an average operating margin of 20 per cent (2019: 23 per cent) and a discounted cost of capital of 13.5 per cent (2019: 13.5 per cent).

Changes in the assumptions would give rise to impairments as follows: a consistent ten per cent decrease in inflows - no impairment; a 100 basis point annual reduction in performance each year - impairment of �0.4 million; a one per cent annual reduction in operating margin - no impairment.

4�� ADJUSTED PROFITS AND EARNINGS

The reported operating earnings, profit before tax and earnings per share are substantially affected by business combination effects and other items. The Directors have therefore decided to report an Adjusted operating profit, Adjusted profit before tax and Adjusted earnings per share which exclude these items in order to enable comparison with peers and provide consistent measures of performance over time. A�reconciliation of the adjusted amounts to the IFRS reported amounts is shown below.

* �� The charge is mitigated by �4,636,000 of tax credits shown in the statement of changes in equity

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The adjusted diluted earnings per share is calculated using the adjusted profit after taxation shown above less the IFRS adjustment for profit attributable to owners of restricted shares of �503,000 (2019: �867,000). The diluted number of shares is the same as used for the IFRS calculation of earnings per share.

Mark to market charge on equity incentive awards

The Group has in prior years and the current period awarded employees options over the Group's shares, some of which are either unvested or unexercised at the balance sheet date. The Group has also made awards of restricted shares ("RSS awards") some of which have not vested at the balance sheet date. Employers National Insurance Contributions ("NIC") are payable on the option awards when they are exercised and on the RSS awards when they vest, based on the valuation of the underlying shares at that point. The Group does however receive a corporation tax credit equal to the value of the awards at the date they are exercised (options) or vest (RSS awards). A charge is accrued for the NIC within IFRS operating profit based on the share price at the balance sheet date. Similarly, a credit for the corporation tax is accrued within equity.

An additional retention payment is made to holders of legacy Long-Term Incentive Plan ("LTIP") awards when they are exercised, all of which are fully vested at the balance sheet date. The payment will be equal to the corporation tax benefit the Group receives on the exercise of the options minus the amount of NIC payable on exercise. For unexercised options this charge is accrued based on the share price at the balance sheet date.

These two charges vary based on the Group's share price (together referred to as mark to market charge on equity incentive schemes) and are not linked to the operating performance of the Group. They are therefore eliminated when reporting adjusted profit.

Contingent consideration

We are required to review and adjust our estimate of the contingent consideration payable in respect of the Impax NH acquisition. Any adjustment is recorded through income but is excluded from adjusted profit. This is not linked to the operating performance of the Impax NH business and is therefore eliminated from operating costs.

Amortisation of intangibles

Intangible management contracts were acquired as part of the acquisition of Impax NH acquisition and are amortised over their 11 year life. This is not linked to the operating performance of the Impax NH business and is therefore eliminated from operating costs.

Finance income/expense

The adjustments represent the removal of charges in respect of unwinding the discount of the contingent consideration payable (see above) and of legacy royalty income.

5�� SEGMENTAL REPORTING

(a) Operating segments

In January 2018, Pax World Management LLC was acquired by Impax and has been re-named Impax Asset Management LLC. This company is based in Portsmouth, New Hampshire and we refer to it as "Impax NH". Impax NH is the manager of Pax World Funds. Impax Asset Management Ltd and Impax Asset Management (AIFM) Ltd manage or advise listed equity funds and accounts, and the Real Assets division. The majority of this business is based in London so we refer to it as "Impax LN". Impax LN itself has two operating segments: "Listed Equity" and "Private Equity". The results of these segments have been aggregated into a single reportable segment for the purposes of these financial statements because they have characteristics so similar that they can be expected to have essentially the same future prospects. These segments have common investors, operate under the same regulatory regimes and their distribution channels are substantially the same. Additionally management allocates the resources of Impax LN as though there is one operating unit.

Segment information is presented on the same basis as that provided for internal reporting purposes to the Group's chief operating decision maker, the Chief Executive.

Year ended 30 September 2020

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Year ended 30 September 2019

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(b) Geographical analysis

An analysis of revenue by the location of client is presented below:

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6�� OPERATING COSTS

The Group's largest operating cost is staff costs. Other significant costs include direct fund costs, premises costs (depreciation of office building lease right of use assets, rates and service charge), amortisation of intangible assets, mark to market charges on share awards and acquisition costs.

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Operating costs include �774,000 (2019: �791,000) in respect of placing agent fees paid to related parties.

7�� STAFF COSTS AND EMPLOYEES

Staff costs include salaries, a variable bonus, social security cost (principally UK Employers' National Insurance on salary, bonus and share awards), the cost of contributions made to employees' pension schemes and share-based payment charges. Further details of the Group's remuneration policies, including how the total variable bonus pool is determined, are provided in the Remuneration Report. Share-based payment charges are offset against the total cash bonus pool paid to employees. NIC charges on share-based payments are accrued based on the share price at the balance sheet date or at the date of exercise.

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Employees

The average number of persons (excluding Non-Executive Directors and including temporary staff), employed during the year was 171 (2019: 151).

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8�� SHARE-BASED PAYMENT CHARGES

The total expense recognised for the year arising from share-based payment transactions was �1,813,000 (2019: �1,160,000). The charges arose in respect of the Group's Restricted Share Scheme ("RSS"), the Group's Employee Share Option Plan ("ESOP") and the Group's Restricted Share Units scheme ("RSU") which are described below. Share-based payment charges also arose in respect of the put and call arrangement made with Impax NH management to acquire their shares in Impax NH. Details of all outstanding options are provided at the end of this note. The charges for each scheme are:

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Restricted Share Scheme

Restricted shares have been granted to employees in prior years under the 2014, 2015, 2017, 2018 and 2019 plans which are not wholly vested. Post year end the Board approved the grant of a further 331,500 restricted shares under the 2020 plan. Details of the awards granted along with their valuation and the inputs used in the valuation are described in the table below. The valuations were determined using the Black-Scholes-Merton model with an adjustment to reflect dividends received by employees during the vesting period. Following grant, the shares are held by a nominee for employees - who are then immediately entitled to receive dividends. After a period of three years' continuous employment the employees will receive unfettered access to one third of the shares, after four years a further third and after five years the final third. The employees are not required to make any payment for the shares on grant or when the restrictions lapse.

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The expected volatility was determined by reviewing the historical volatility of the Company and that of comparator companies. The expected dividend rate is determined using the Company share price and most recent full year dividend to grant date.

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Employee share option plan

Options granted between 2014 and 2017

The strike price of these options was set at a 10 per cent premium to the average market price of the Company's shares for the five business days (ESOP 2014: 30 days) following the announcement of the results for each of the respective preceding financial years. The 2014 - 2015 ESOP options have vested. The 2017 options do not have performance conditions but do have a time vesting condition such that they vest subject to continued employment on 31 December 2020.

The valuation was determined using the Black-Scholes-Merton model.

Options granted in 2018 and 2019

The strike price of these options was set at �1. The options do not have performance conditions but do have a time vesting condition such that the options vest subject to continued employment five years following grant. Vested shares are restricted from being sold until after a further five year period (other than to settle any resulting tax liability).

Post year end the Board approved the grant of 610,000 options under the 2020 plan. The options have a strike price of �3 but otherwise have the same conditions as the other options.

The valuation was determined using the binomial model.

Share options are equity settled.

Options outstanding

An analysis of the outstanding options arising from Company's ESOP and LTIP plans is provided below:

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Exercise prices for the options outstanding at the end of the period were 56.9p for the ESOP 2014, 180.2p for the ESOP 2017 and 100.0p for the ESOP 2018 and 2019. The weighted average remaining contractual life was 5.5 years.

The Group continues to plan that future options exercises will primarily be satisfied by the Group's Employee Benefit Trusts (the "EBT"). The Group funds the EBT to acquire shares or issues shares to the EBT to cover the grant of RSS awards and option exercises.

Restricted stock units

The Group awarded Restricted Stock Units ("RSUs") to Impax NH staff and management on 18 January 2018. The RSUs entitle holders to receive Impax shares with a total value equal to 10 per cent of the Contingent Consideration paid for the Impax NH acquisition. The number of shares that each individual will receive under the RSUs is determined on 15 January 2021 after the amount of Contingent Consideration payable is finalised using the average Impax share price for the 20 consecutive trading days ending 15 January 2021. There is a further two-year restriction on the holders' ability to sell the shares. The shares are forfeited if the individual leaves at any time before the restricted period ends.

The charge to the income statement for these awards is determined each year by estimating the total value of shares that will be awarded (using the estimate of Contingent consideration) and spreading this over the five year period until the restrictions cease. The estimates are updated each year and the charge adjusted accordingly.

Based on the current estimate of Contingent Consideration no shares will be issued.

Impax NH put and call arrangement

The Group has a put and call arrangement which will require it to purchase shares held in Impax NH by its management. The shares held by Impax NH management were originally acquired as part of a share-based payment arrangement and are subject to certain restrictions. The original share-based payment agreement and the put and call arrangement together represent a new share-based payment. The charge is spread over a three year period from the date of acquisition.

9�� FINANCE INCOME

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Fair value gains represent those arising on the revaluation of listed and unlisted investments held by the Group and any gains or losses arising on related hedge instruments held by the Group.

The fair value gain comprises realised losses of �53,000 and unrealised gains of �851,000 (2019: �149,000 of realised losses and �252,000 of unrealised gains).

10 FINANCE EXPENSE

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Finance costs on bank loans for 2020 mainly represent commitment fees payable on the Group's revolving credit facility.

11 TAXATION

The Group is subject to taxation in the countries in which it operates (the UK, the US and Hong Kong) at the rates applicable in those countries. The total tax charge includes taxes payable for the reporting period (current tax) and also charges relating to taxes that will be payable in future years due to income or expenses being recognised in different periods for tax and accounting periods (deferred tax).

(a) Analysis of charge for the year

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Tax credits are also recorded in equity in respect of tax deduction on share awards arising due to share prices increases of �4,636,000 (2019: �251,000) and tax credits on cash flow hedges of �13,000. This includes a credit of �175,000 to reflect the cancellation of the planned reduction in the UK tax from 19 per cent to 17 per cent that was due to come in to effect from 1 April 2020. The adjustment in respect of prior years in 2020 mainly reflects reductions in the tax expected to be payable on private equity income, recorded in prior years, as result of transactions which took place in the year.

(b) Factors affecting the tax charge for the year

The UK tax rate for the year is 19 per cent. The tax assessment for the period is lower than this rate (2019: lower). The differences are explained below:

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The Group has tax losses of �4,467,000 available for offset against future taxable profits in the USA which have not been recognised as deferred tax assets on the basis that, based on current profitability of the USA business we will not be able to utilise them in the next 2 years.

(c) Deferred tax

The deferred tax asset/(liability) included in the consolidated statement of financial position is as follows:

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12 EARNINGS PER SHARE

Basic earnings per share ("EPS") is calculated by dividing the profit for the year attributable to ordinary equity holders of the Parent Company (the "Earnings") by the weighted average number of Ordinary Shares outstanding during the year, less the weighted average number of own shares held. Own shares are held in Employee Benefit Trusts ("EBTs").

Diluted EPS includes an adjustment to reflect the dilutive impact of share awards.

The number of shares to be issued under the Restricted Share Units is based on the Impax NH assets under management at the vesting date. Assets under management are currently below the threshold for shares to be issued so the RSUs are currently not dilutive. The put and call arrangement to acquire Impax NH management shares is also currently not dilutive.

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Earnings are reduced by �503,000 for the year ended 30 September 2020 (2019: �867,000) to reflect holders of restricted shares receiving dividends during the vesting period.

The weighted average number of shares is calculated as shown in the table below:

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The basic and diluted number of shares includes vested LTIP option shares on the basis that these have an inconsequential exercise price (1p or 0p).

13 DIVIDENDS

Dividends are recognised as a reduction in equity in the period in which they are paid or in the case of final dividends when they are approved by shareholders. The reduction in equity in the year therefore comprises the prior year final dividend and the current year interim.

Dividends declared/proposed in respect of the year

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The proposed final dividend of 6.8p will be submitted for formal approval at the Annual General Meeting to be held on 18 March 2021. Based on the number of shares in issue at the date of this report and excluding own shares held the total amount payable for the final dividend would be �8,838,000.

Dividends paid in the year

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14����� GOODWILL

The goodwill balance within the Group at 30 September 2020 arose from the acquisition of Impax Capital Limited on 18 June 2001 (Listed Equity and Private Equity operating segment) and the acquisition of Impax NH in January 2018.

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Impax NH consists of only one cash-generating unit ("CGU"). Goodwill is allocated between CGUs at 30 September 2020 as follows - �10,677,000 to Impax NH and �1,629,000 to the Listed Equity and Private Equity CGU's.

The Group has determined the recoverable amount of its CGUs by calculating their value in use using a discounted cash flow model. The cash flow forecasts were derived taking into account the budget for the year ended 30 September 2021, which was approved by the Directors in October 2020.�

The goodwill on the Listed Equity and Private Equity CGUs arose over 15 years ago and the business has grown significantly in size and profitability since that date. There is accordingly significant headroom before an impairment is required.� The main assumptions used to calculate the cash flows in the impairment test for these CGUs were that asset under management would continue at current levels and margins would continue at current levels, that fund performance for the Listed Equity business would be 5 per cent per year and a discount rate of 12.5 per cent. The discount rate was derived from the Group's weighted average cost of capital. There has been no impairment of goodwill related to these segments to date and there would have to be significant asset outflows over a sustained period before any impairment was required. If the discount rate increased by 3 per cent there would no impairment and if fund performance reduced to zero there would be no impairment.

The impairment test for the Impax NH CGU showed no impairment was required and used the following key assumptions - average fund inflows of $0.57bn, fund performance of 5 per cent, an average operating margin of 20 per cent and a discount rate of 12.5 per cent. Changes in the assumptions as follows would individually not give rise to an impairment: a consistent ten per cent decrease in inflows; a 100 basis point annual reduction in performance each year; a 1 per cent annual reduction in operating margin, a 1 per cent increase in discount rate.

15 INTANGIBLE ASSETS

Intangible assets mainly represents the value of the management contracts acquired as part of the acquisition of Impax NH.

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16 PROPERTY, PLANT AND EQUIPMENT

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Lease arrangements

The Group has adopted IFRS 16 for the first time in these financial statements. Property, plant and equipment therefore includes right-of-use assets in relation to operating leases for the Group's office buildings.

The carrying value of the Group's right of use assets, associated lease liabilities and the movements during the period are set out below.

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All contracts existing at the date of the initial application of IFRS 16 have been captured and recognised under IFRS 16.

The contractual maturities on the undiscounted minimum lease payments under lease liabilities are provided below along with a reconciliation to the lease liability recognised at 1 October 2019:

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The Company's London office lease has an extension option of a further five years from June 2027, subject to a rent review, which are not included in the above numbers on the basis that it is not yet reasonably certain that it will be exercised.

17 TRADE AND OTHER RECEIVABLES

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18 CURRENT ASSET INVESTMENTS

The Group makes seed investments into its own Listed Equity funds and also invests in its Private Equity funds. Where the funds are consolidated the underlying investments are shown in the table below. Investments made are shown below.

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19 CASH AND CASH EQUIVALENTS, CASH INVESTED IN MONEY MARKET FUNDS AND LONG-TERM DEPOSITS

Cash and cash equivalents under IFRS does not include deposits in money market funds or cash held in deposits with an original maturity of more than three months. However the Group considers its total cash reserves to include these amounts. Cash held in Research Payment Accounts ("RPAs") is collected from funds managed by the Group and can only be used towards the cost of researching stocks. A liability of an equal amount is included in trade and other payables. This cash is also excluded from cash reserves. A reconciliation is shown below:

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The Group is exposed to interest rate risk on the above balances as interest income fluctuates according to the prevailing interest rates. The average interest rate on the cash balances during the year was 0.3 per cent (2019: 0.3 per cent). A 0.1 per cent increase in interest rates would have increased Group profit after tax by �32,000. An equal change in the opposite direction would have decreased profit after tax by �32,000.

The credit risk regarding cash balances of the operating entities of the Group is spread by holding parts of the balance with RBS International, Lloyds Bank, Citizens Financial Group (all with Standard & Poor's credit rating A-2) and the Bank of New Hampshire (unrated) with the remainder in money market funds managed by BlackRock and Goldman Sachs (both with a Standard & Poor's credit rating of AAA).

20 TRADE AND OTHER PAYABLES

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The most significant accrual at the year-end relates to variable staff remuneration.

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21 LOANS

To part fund the acquisition of Impax NH the Group signed a debt facility with RBS. The facility consisted of a US$13 million term loan repayable annually over a three year term and a US$13 million revolving credit facility ("RCF") with a five year tenor. The term loan incurred interest at US LIBOR plus 2.9 per cent and the revolving credit facility at US LIBOR plus 3.3 per cent. On completion of the acquisition the Group drew down the term loan in full and US$12 million of the revolving credit facility. During 2018 the RCF was repaid in full, but remains available. During 2019 the term loan was repaid in full.

A reconciliation of the movement on the loan is provided below

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22 ORDINARY SHARES

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23����� OWN SHARES

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Included within Own Shares are 4,747,723 shares held in a nominee account in respect of the Restricted Share Scheme.

24 FINANCIAL COMMITMENTS

At 30 September 2020 the Group has outstanding commitments to invest up to the following amounts into private equity funds that it manages.

���� �203,000 (2019: �203,000) into Impax New Energy Investors LP; this amount could be called on in the period to 31 December 2020;

���� �113,000 (2019: �113,000) into Impax New Energy Investors II LP; this amount could be called on in the period to 22 March 2021; and

���� �2,137,000 into Impax New Energy Investors III LP (2019: �2,994,000); this amount could be called on in the period to 31 December 2026.

The Group has initially acquired an ca. 83.3 per cent interest of Impax NH's share capital. Impax NH's management and staff shareholders (the "Management Shareholders"), representing the remaining ca.16.7 per cent of Impax NH's issued share capital will retain their shareholding until 2021 when if either Impax or the Management Shareholders exercise a put and call option arrangement, the Group will acquire their entire holding for US$8.3 million and up to $6.3 million of Contingent Consideration. This would be paid in 2021 in Impax equity and/or cash, as the Group elects.

Contingent Consideration may also be payable to the sellers of the 83.3 per cent stake. This will be determined based on Impax NH's average AUM as at 30 June 2020, 30 September 2020 and 31 December 2020 and will rise linearly from zero, if Impax NH's average AUM is not more than US$5.5 billion, to US$37.5 million for the entire share capital of Impax NH, if Impax NH's average AUM is $8 billion or above.

Given the actual AUM at 30 June 2020 and 30 September 2020 and the projected AUM at 31 December 2020 we have estimated that no Contingent Consideration will be payable.

25 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS

This note should be read in conjunction with the Consolidated cashflow statement. It provides a reconciliation to show how profit before tax, which is based on accounting rules, translates to cashflows.

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26 NEW ACCOUNTING STANDARDS

New standards, interpretations and amendments adopted during the year

IFRS 16 Leases

The Group has applied IFRS 16 for the first time for its annual reporting period commencing on 1 October 2019. IFRS 16 replaces IAS 17 Leases and is effective for reporting periods beginning on or after 1 January 2019.

Where the Group is a lessee, IFRS 16 requires operating leases to be recorded in the Group's statement of financial position, reflecting a lease liability and an associated right-of-use ("ROU") asset. The lease liability is initially measured at the present value of the future contractual cash flows remaining under the lease term, discounted using the Group's incremental borrowing rate. Interest is subsequently accrued on the lease liability and presented as a component of finance costs, and calculated using the effective interest method to give a constant rate of return over the life of the lease whilst the liability is reduced by the lease payments. The ROU asset is initially measured at the amount of the lease liability plus initial direct costs incurred by the lessee, adjusted for any lease incentives and the estimated cost of restoration obligations. The ROU asset is presented within property, plant and equipment and depreciated over the lease term as the benefit of the lease is consumed. The Group applies judgement in assessing whether to include options to extend or cancel the lease. All relevant factors that could create an economic incentive to exercise the option are considered and the option is included if it is reasonably certain to be exercised. After the lease commencement date, the Group reassesses the lease term if there is a significant change in circumstances that is within its control and affects the likelihood that it will exercise (or not exercise) the option.

The Group has measured the IFRS 16 ROU assets and lease liabilities as if the standard had always been applied but based on an incremental borrowing rate at the date of initial adoption, 1 October 2019. Comparative information has not been restated as the Group has applied the modified retrospective approach with the cumulative effect of initially applying the standard recognised as an adjustment to the opening retained earnings at 1 October 2019. The Group has applied the optional exemption in the standard which permits the cost of short-term (less than 12 months) leases to be expensed on a straight-line basis over the lease term. These lease arrangements are not material to the Group.

As a result of applying IFRS 16, the Group has recognised lease liabilities and ROU assets at 1 October 2019 of �11,991k and �10,693k respectively in respect of leases over its office buildings. The Group has also eliminated the accrual of �1,051k previously required to straight line lease charges over the lease life. These adjustments have reduced the Group's net assets by �247k which is recorded as a reduction in retained earnings at 1 October 2019. The weighted average incremental borrowing rate applied to the lease liabilities on 1 October 2019 was 4.76 per cent.

New Standards and Interpretations not yet adopted

There were no other Standards or Interpretations that were in issue and required to be adopted by the Group as at the date of authorisation of these consolidated financial statements. No other Standards or Interpretations have been issued that are expected to have a material impact on the Group's financial statements.

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