No Pain, No Gain: Our Man's Portfolio: Regal's facing the heave- ho

EIGHT UP, four down - that is the no pain, no gain score after four months' investing. With many of the dozen shares selected dotted around the stock market's under-card, the steady headway recently achieved by small cap shares has clearly made a helpful contribution to the portfolio's performance.

Even so, the one and only Footsie constituent has provided much of the excitement. Allied Domecq, tipped at 482.5p, has been as high as 626.5p as the tug- of-war over its pubs estate has hogged the limelight.

Whitbread is offering shares; Punch Taverns has pounds 2.7bn in cash on the table. Many suspect that once the pubs are sold Allied's remaining wines and spirits business will attract an overseas bid and the relatively small fast-food operation will be unloaded. So if Punch should win the day, Allied's chairman Sir Christopher Hogg could have a pounds 7bn-plus cash mountain to distribute among shareholders. There is no rush for the portfolio to take any action; at this stage it is worth sitting tight.

One of the disappointments is the only mid-capper, the Safeway supermarket chain. But the shares are only a few coppers below the buying price and there is no reason to think Safeway will not emerge as a rewarding investment from the turbulence now engulfing retailers. And there is the comfort of a 5.9 per cent dividend yield. The rest of the pack, scattered among the smaller brethren, have more than held their own.

The reason for buying cider- maker Merrydown, which has suffered a mild hiccup, remains in place. Leisure group Springwood will hopefully overcome the sudden appearance of small sellers, and Paramount, a pubs chain, jogs along comfortably above its December low; builder Galliford has slipped from its year's high.

Regal Hotel has yet to top the tip price. The portfolio's first member has been a bitter disappointment. After threatening to fall out of bed the shares seem to have stabilised. The substantial Far Eastern shareholding is not inspiring confidence but there is little doubt Regal deserves a higher rating. Investment is a long-term exercise. But when a share pointedly underperforms it is wise to consider drastic action. I am sorry to warn that unless they start to display more confidence Regal could be destined to become the first no pain, no gain constituent to suffer the old and unceremonious heave-ho.

Gowrings, up from 103.5p to 148.5p, could be laying claims for long- term membership. Like Allied, there are break-up possibilities. Guinness Peat, one of the more active fund managers, has around 11 per cent and has advocated the merits of demerging the Burger King restaurant chain from the group's traditional car dealerships.

Montana, a pure restaurant business, is now preparing its sixth which will be at Wimbledon. Three prominent institutional investors subscribed for shares at 200p, raising pounds 960,000. Profits last year were pounds 103,000.

Global, the food group, has been active and made a successful take-over bid by feasting on Sims Food, a burger provider. Anglo Pacific, a mining group, continues to strengthen on hopes of corporate developments.