Current trading resilient For the 10 months to May, revenues increased 6% (+8% in H1) of which underlying revenues increased 2% (+1% in the 4 months to May) highlighting a resilient performance through Covid-19 disruptions. This was aided by growth in John Crane and delivery of orders in Detection, while Medical saw growth driven by increased critical care demand. All of its 75 plants are open, but there will inevitably be some higher operational costs and FY20 guidance remains withdrawn but the progress y-t-d is in-line with our published forecasts. The Group remains in a strong financial position (cash conversion driving cash to £300m from £250m and the undrawn RCF of £640m with average debt maturity of over 4yrs giving a near £1bn of financial headroom). Further savings support 18-20% margin target Smiths has announced a restructuring programme to support its goal of 18-20% operating margins which should bring £70m of annualised savings from FY22 (cash cost of £65m spread over FY20 and FY21). Our view and valuation Overall, we view this as a positive update, with the Group delivering growth and being proactive with costs out. There are visible improvements in some of its divisions and the separation of Smiths Medical should create value. Clearly, trading has been impacted by Covid-19 and the Medical separation is on Hold. On balance, we believe the investment case remains intact given; 1) Smiths Medical should realise value; 2) the business has traded robustly given some of its medical and infrastructure critical products; 3) John Crane will be nearly half of group profits. The shares are trading on a FY21E PE of 13.9x and EV/EBITDA of 9.4x. Next catalyst is the FY20 results due on 24 September.