Lloydspharmacy will be launching a new strategy to expand its OTC business, parent company Celesio has said.

The multiple will "purge" its OTC ranges, launch a "price offensive" and new website for its mail-order business, as well as extending opening hours, it announced.

The proposals were revealed as the company announed revenue growth for Lloydspharmacy over the first half of the financial year, which it attributed to an increase in prescription volume and supply contracts with hospitals, prisons and other institutions.

Wholesaler AAH, also owned by Celesio, had shown "good earnings development" too and had increased margins through "operational improvements", Celesio said.

But despite the positive UK performance, Celesio reported a drop in overall profit of 16.3 per cent for the first half of 2011, to £239.2 million (€271.7 million).

The group anticipated this year's profits would be depressed by €120 million overall.

"The enormous government measures and a stagnating, in parts declining pharmaceutical market, significantly depressed our earnings in the first half of the year," said Wolfgang Mahr, Celesio's CEO and interim chairman of the management board. "At the same time, we face stiffer competition in some countries, particularly in wholesale where, at times, irrational battle for market shares is being played out."