For a measure of the regard in which the City holds Philip Bowman, look no further than Smiths Group’s share price. In the year since the former Allied Domecq and Scottish Power boss was hired as chief executive, the £4 billion engineering conglomerate has outperformed the FTSE all share by 27 per cent.

Inevitably, given the scale and complexity of Mr Bowman’s task, the shares continue to run ahead of a commensurate transformation in underlying trading. Today’s full-year results, albeit modestly ahead of forecasts, might be best described as solid rather than sparkling: underlying sales were up 6 per cent and pre-tax profits ahead 10 per cent.

But it was the detail of Mr Bowman’s turnaround plan that was more eagerly awaited. First, the company, now split into five divisions, aims to produce annual cost savings of £48 million within three years. Second, Mr Bowman has set sales and margin targets for each division which, in aggregate, imply a pick-up in growth rates over current forecasts. These have also been accompanied by a matching management incentive scheme

Progress has already been made. Smiths’s large head office has been abandoned for more modest premises, and the backlog of orders in its underperforming medical systems division has already fallen 90 per cent on the year.

But the challenges have only increased since Mr Bowman took office. Selling Flex-Tek, which supplies the US housing market, appears out of the question for now. The proposed $700 billion bailout of Wall Street might also have knock-on effects on capital spending elsewhere: through Smiths’s detection and interconnect businesses, the US government is a big customer.

With much of its sales drawn from oil and gas, healthcare and security, Smiths might be considered relatively defensive. What is less easy to protect is Smith’s share price premium to its engineering peers - of some 35 per cent on today’s forward multiple of 13 times. That suggests further near-term share price outperformance will be harder to achieve.

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