Greggs has delivered a £20 million windfall for shareholders after the chain's freshly made sandwiches and £2 breakfasts boosted trading.

The firm, which runs 1,650 shops, said its like-for-like sales lifted 5.9% in the 16 weeks to April 25, with its upgraded range of healthy options under 400 calories proving popular.

The retailer will return £20 million to investors through a 20p a share special dividend after carrying out a capital review of its business. This replaces a proposed £10 million share buyback programme the firm had announced at its full-year results in March.

Greggs said the year had started strongly, supported by rising disposable incomes and low inflation costs from suppliers.

It said it now expects its first half performance will be ahead of previous forecasts, and overall predicts good growth for the year.

The group plans to refresh its menus by introducing items such as a sugar-free soft drinks range and a summer berry fruit pot.

During the period the group said it opened 24 shops and closed 18, as it continues to move more of its estate away from high streets towards industrial parks and motorway service areas. It said 17 of the 24 outlets it opened were franchised units in transport locations.

The group is about to open a test site with the Irish motorway service operator Applegreen at a service area on the M2 near Belfast.

Greggs said working with Applegreen allowed it to "assess Northern Ireland's appetite" for its range.

It has now refitted 69 shops in the period and will tackle between 200 and 220 this year as it upgrades its estate.

Shore Capital analyst Darren Shirley said: "Greggs continue to surprise us on the strength of its trading momentum."

The broker upgraded Greggs full-year pre-tax profit forecast by around 3% to £68.7 million.