Strengthening of IKEA relationship

AIM:KBT

10 June 2010

K3 BUSINESS TECHNOLOGY GROUP PLC

("K3" or "the Group")

Announces

Strengthening of Relationship with IKEA

K3, which provides Enterprise Resource Planning ("ERP") solutions to the supply chain industry, is pleased to announce a strengthening of its relationship with Inter IKEA System B.V. ("IKEA"), the global home furnishings business, with IKEA naming K3 as its sole outsourced provider of Retail ERP software packages for its franchisee network on a global basis.

After a comprehensive review of its global IT requirements, IKEA has decided that all its franchisees must adopt an IKEA standard IT platform. K3's retail software operation based in Holland is already IKEA's software partner of choice for 10 of its franchisees, with K3 having developed the IKEA Master Version of Microsoft Dynamics for these countries. IKEA's decision to move all remaining franchisees to a standard ERP system means the likely extension of K3's retail software solution into new territories over the next 36 months.

The standardisation of IKEA franchisees' IT platforms is expected to deliver phased revenues to K3 over the course of the next 36 months and will help to underpin the performance of K3's Retail Software Division over this time.

Andy Makeham, Chief Executive of K3, commented,

"Through our Dutch operations, K3 has a long standing relationship with IKEA, having developed, and owning the IP for, the IKEA Master Version of Microsoft Dynamics. Over the years, this relationship has deepened as our ERP software has been implemented across Western Europe, the Middle East, Asia and Australasia.

IKEA's decision to standardise its ERP platforms should significantly benefit K3. It is also a significant endorsement of both the quality of our software and service levels, and should help to underpin the performance of our retail software division over the next two or three years."

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