It is possible to win the work even at a much higher price, but you'll always lose a few that are determined to shop on price alone. Did you go out to quote?
I have won work against them before based on getting off my backside and going out to quote which they didn't, with this one the info came from another tm'er that I get on with. In his text he said it was easily worth £200.
Mike, they might not being doing over £73k because you can become Vat registered at any level (if it suits your needs - I'm vat registered but do under £73k).
I don't understand your thinking here Mike, they must be flogging their arses to death if they are working at about £20/hour or less (remember the last job I mentioned about them) taking into consideration fuel costs, chemicals etc.