UNITED KINGDOM (From the Leicester Mercury) -- A tissue paper manufacturer in Leicester has said that flood damage to one of its sites is expected to disrupt its first quarter next year.

Sofidel UK, in Hamilton, suffered "significant flood damage" at one of its sites in Lancaster.

Sofidel raised its UK profile when its Italian parent Sofidel Group purchased tissue paper manufacturer LPC from the Leicester-based Tejani brothers in 2010.

In a statement in the UK division's annual accounts for the year ending December 2015, the company said: "The flood caused significant damage to property plant and equipment and stock as well as interrupting production.

"We expect the losses sustained to be covered by our insurance policies but envisage the disruption continuing throughout Q1 2016."

The firm saw a drop in pre-tax profits from £45.2 million for the year to the end of December 2014 to £35.1 million last year.

Turnover also dropped from £295.6 million for the 12 months to December 2014 to £255.2 million last year.

Giuseppe Munari, Sofidel's UK operations manager, said: "The profits have been influenced mainly by the increase of the exchange rate of USD, which is the reference currency for the purchase of pulp, and by a reduction of the turnover.

"Nevertheless the level of profitability has been in line with the expectations of the company.

"The reduction of the turnover, foreseen at the end of 2014, was managed in line with the strategy of the company to focus on margins rather than volume, which in any case we are confident to recover during 2016/17.

"Regarding the flooding which has affected the mill in Lancaster, this will not impact our operation because we shall be able to provide the paper from other factories within our group.

"This event has accelerated the programme of refurbishment of the factory which will enjoy a much greater efficiency in a shorter period of time."

Sofidel UK employs 439 people in Leicester and plans to recruit a further 15 soon.

The Italian tissue giant bought the business in 2010 from Shiraz and Amin Tejani. The family reportedly made £120 million from the sale.

Shiraz set up LPC in Leicester with his brothers in 1980, originally to supply local shops with tissues and paper products.

They turned it into the UK's leader in the so-called "private label" market - where supermarkets sell products under their own name.

Last year, the family announced plans expand their new business, Leicester Tissue Company (LTC), and create up to 350 jobs at a new multi-million pound factory.

Sofidel UK has branches in Hamilton, Rothley Lodge, and Lancaster.