1.Grease a 19cm x 29cm lamington pan and line base with paper, then grease paper. Preheat oven to 180°C.
2.In a heavy frying pan, stir coconut constantly over heat until light golden brown. Remove from pan to cool.
3.Cream butter and sugar in small bowl with electric mixer until light and fluffy. Beat in eggs one at a time, add honey, and beat until combined. Transfer mixture to a large bowl and stir in toasted coconut. Stir in half the sifted flour and half the milk until combined, then stir in remaining flour and milk.
4.Spread mixture into prepared pan. Bake for about 35 minutes. Stand 5 minutes before turning on to wire rack to cool. Spread cold cake with icing, sprinkle with extra coconut if desired.
5.To make caramel icing, melt butter in saucepan, add sugar and stir constantly over heat without boiling for about 2 minutes. Stir in milk then gradually stir in sifted icing sugar. Stir until smooth.