Separate the eggs. Beat the butter and sugar until light and creamy, add the egg yolks and beat well again. Fold in the flour and milk in alternate batches, finishing with flour. Grease and lightly flour a 9-10cm round layer cake tin and put cake mixture in tin.
Beat the egg whites in a clean bowl until foamy. Gradually add the sugar, beating well between batches to dissolve it and continue beating until thick, but not too stiff. Fold in the coconut, then spread coconut topping evenly on the cake mixture - don't put too much topping in the middle as this prevents the cake from cooking through evenly. Bake at 350° for about ¾ hour, or until cooked*.
(*Be careful not to open the door of the oven too soon as it will easily sink in the middle if it is not cooked through)