FULL-year results yesterday from Marks & Spencer, the UK's largest clothing retailer, did nothing for the share price which was already languishing after profit warnings earlier in the year.

The price fell 4p to 576p on flat underlying profits in the year to March 31 and the prospect of a similar performance in 1998-99, although benefits from the group's #2200m expansion programme, announced last year, are expected to be seen from 1999-2000, generating ''significant'' sales growth.

Meanwhile, the costs of expanding both in the UK and overseas have only just begun to bite and competition is increasing.

Unveiling annual profits up 6% from #1102m to #1170m on sales 5.1% ahead at #8240m, chairman Sir Richard Greenbury warned that he expected the general UK retail climate to get tougher this year. He said last year's boom in home furnishings and consumer durables was clearly over. Food and clothing sales nationally

were running about 5% to 6% ahead, which hardly signified boom times.

The profits outcome was, in fact, at the top of market projections but includes a #53m exceptional tax credit. Stripping this out of the equation left profits at the bottom of the range.

The impact of the strong pound and the investment programme sliced #38m off trading profits. The cost of investment is expected to grow to #85m this year, and there will be a further #35m hit from the strength of sterling. Last year also saw a #20m rise in pension costs, which was blamed on the Chancellor's abolition of the dividend tax credit.

Sir Richard said that the return on sales had held up despite the strong pound, increased pension costs and the charges incurred while converting the 19 Littlewoods stores that the company bought last year.

Profits from overseas - where M&S has stores in Continental Europe, Asia and North America - fell by almost 26% to #67.9m, and they are projected to retreat further in the current year. ''The effect of the Asian economic collapse led to a drop in retail spending in all Far East countries,'' the company said.

At home - where M&S plans to spend #1100m by the year 2000 on increasing the number of stores and expanding others - profits advanced 8.4% to #1030m. Sales of clothing, footwear and gifts were up 8.1% on the year.

UK food sales, an area where competition is intense, were up 3.5% in volume terms after adjustment for the absence of Easter in the past financial year. Home furnishing sales growth slowed but still rose 7.8%.

Financial services, which is one of the fastest-growing parts of M&S - selling pensions and Peps as well as unit trusts and loans - increased its pre-tax profits by 18% to #89.4m and now contributes more than 8% of total group profits.

Over half-a-million new account cardholders were recruited, taking the total to more than five million.

M&S is to ask shareholders to give permission to buy back 10% of its shares in the open market, though it has no immediate intention of exercising this power should it be approved.

Shareholders are to receive a final dividend of 10.7p, taking the total to 14.3p, an increase of 10% on 13p last time.

However, M&S's staff are also being looked after with an #80m pay package, which is made up of a 4% increase, plus a discretionary 1.25%.