Costs associated with probes into corporate governance helped to damage profits at Independent News and Media, the group has said.

PUBLICATIONS distributor Newspread has taken a legal challenge to a “flawed” and “unfair” tendering process under which its contract to distribute Ireland on Sunday newspaper and Buy & Sell magazine was terminated, resulting in lost profits of more than €1.5 million.

REPRESENTATIVES for shopkeepers have accused Newspread and Eason of behaving like “corporate thugs” over new charges and conditions imposed on newsagents and retailers selling their products.

Before-tax profit at Independent News and Media rose 55% to €189.1m in 2004 from €122m in 2003.

Independent News and Media have reported after-tax profits of €47.7m for the first six months of the year.