To be on the phone with someone that you're intimately interested in for long periods of time; or talking to them in person as well in a flirtatious manner.
This British phrase was originally to describe the act of painting a fresh coat of paint on a small china horse, often found in bric-a-brac / jumble sales and charity shops. The phrase is now primarily used to describe going for a messy poo on a cheap toilet.
"Our John's been busy coating the penny horse this morning."
"By gum, that curry last night were right dodge -- I've got to coat the penny horse, I'll be back in half-hour."
Similar to the game soggy waffle. Once the first male falls asleep it is the duty of all present men to jerk off until completion and finish on the bros face.