Britain's Ashtead on Tuesday unveiled an up to 1 billion pounds ($1.40 billion) share buyback plan as it forecast annual earnings to be better than its prior view thanks to cost-cutting measures and strong demand for its rental equipment.

The company, which rents out equipment to the construction and industrial sectors, generated a record 1.06 billion pounds in free cash flow in the nine months to January.

It used that cash to reduce its 4.28 billion pound net debt, a move that is expected to help it meet its leverage target range by the end of this month.

"The group has performed exceptionally well in all our end markets and we emerge from the pandemic in a position of strength," Chief Executive Officer Brendan Horgan said in a statement ahead of the company's capital markets event on Tuesday.

The company said it planned to disclose at the event information on how it would boost its speciality businesses, such as climate control, power and pump solutions, which have underpinned its performance in the past year.

Ashtead also said it had continued to perform well in the fourth quarter of its financial year ending April 30.

The company plans to restart its share buyback programme next month at a run rate of around 75 million pounds per quarter, after pausing it last year due to the COVID-19 pandemic.

Shares in the FTSE 100 company were up 1.2% by 1152 GMT on Tuesday.