Here is how to make the character in upper case, except HTML-entities:
$s = substr(preg_replace('/(?<=^|;)(.+?)(?=&[0-9A-Za-z]+;|$)/e', "strtoupper('$1')", ' '.$s), 1);
There is small kludge, however. Unfortunately I tired to find out the way how to exclude HTML-entity at the start of the line, so I have added 1 dummy character at the start of the text and removing it after the conversion.