COGS normally includes material and LABOUR , I am guessing much...

COGS normally includes material and LABOUR , I am guessing much of LBL's extra expenses are related to it having in addition to its service division (while QSP looks to only do services ) a product division and technology division , those divisions take extra labour to run and that labour may not be included in COGs but are divisions that are giving LBL revenue growth .

Could it be possible you are assuming too high a "employee and admin expense " ?
A private company the size of QSP would in theory only need one administrator for both payroll and accounts and the GM IMHO plus say 40K in accounting fees per annum .
The admin office would be part of the workshop so little extra rent
I would think Mathew Twist the CFO for LBL would be experienced enough to break down the costs of the unaudited accounts and be able to ascertain appropriate achievable margins as the operation is analogous to his current work center that he has been in for many years .
Personally If I was a buyer with skills in the business , I would be more interested in the top line figures which should be even easier to check on .